Buying - read the fine-print

Don’t be bulldozed into signing an offer to purchase, even if you’re very keen to buy a property.

That’s the advice to homebuyers — and especially first-time buyers — from Dr Piet Botha, chairman of the Nationlink estate agency group, who says it is vital that they first read every clause in an offer to purchase and make sure they understand them all.

"Buyers should never be persuaded to sign an offer on the basis that they may 'lose' the property to a competing purchaser unless they make a hasty decision — and they should be wary of an agent who does not take the time to go through the document with them or is unable to fully explain anything that is unclear.

"This especially applies to first-time buyers who, it appears, are often urged to quickly sign offers to purchase with the vague assurance that if they change their minds they can use the 'cooling-off clause' to withdraw from the deal.

"The fact is, that with little experience of property transactions, they may not know enough to properly secure their right to 'cool off', or how to exercise it if they do have second thoughts."

Caveat emptor
Buyers should be aware, Botha says, that it is a requirement of the estate agents’ Code of Conduct for an agent to identify and explain the 'material' clauses of any offer to purchase, to the buyer as well as the seller.

These include clauses dealing with:

  • The purchase price of the property and its method of payment;
  • The occupation date and any occupational interest payable;
  • The specific contractual obligations of the seller or buyer — such as the procurement of an Electrical Certificate of Compliance;
  • Any conditions such as the buyer’s ability to secure a home loan or need to first sell another property;
  • The amount of sales commission and when it is payable;
  • The condition of the property ('voetstoots');
  • The date when risk in the property will pass to the buyer; and
  • Any special conditions added to the agreement by either party.
  • "However, given the history of property ownership in South Africa, reputable agents accept that they have an even greater responsibility to protect buyers, especially when it comes to offers to purchase.

"And those agents who do not have this attitude should be avoided by buyers — no matter how appealing the property or 'urgent' the sale."

Article from: http://iafrica.com/property