The power of an exceptional offer to purchase is in the detail
Years of experience underpin the Pam Golding offer to purchase, which aims to serve both buyer and seller. It prompts both parties to deal with all the terms, which ensures all issues are covered and there is less room for dispute at a later stage. Every agreement is unique and challenges can arise during any sale – our experts weigh in on what you should be looking for when putting pen to paper.
You’re the Seller
- Start with the bigger picture and work backwards. The offer needs to contain all the conditions of sale on which both parties have agreed – think date of occupation, occupational rent, fixtures and fittings, and any other conditions. Expert advice? Be sure to disclose any latent defects (of which you are aware) to the buyer, i.e. defects that would not reasonably be visible on inspection. Why? You can be held accountable in the future and it could potentially jeopardize the sale.
- Fixtures and fittings. Expert advice? Document any fixtures and fittings of a permanent nature that you intend to keep and that you don’t want to form part of the sale. Why? These are deemed to form part of the property and therefor this needs to be stipulated. Pam Golding suggests being overly cautious when considering what is moveable and what needs to remain. The old convention of what is fixed is not clear anymore. With many properties sporting built-in TVs, integrated sound systems, built-in headboards and modular fitted furniture, there is more room for misunderstanding than ever before.
- Occupation date. Check the occupation clause in your offer to purchase. If you don’t vacate the premises on the occupation date, you could become liable for occupational rent (paid to the buyer). Expert advice? Any seller with a lease in place must remember the importance of the term, ‘huur gaat voor koop’, meaning ‘lease comes before sale’, which applies to every sale agreement. It affects the occupation date relating to the sale of the property. Why? Unless the tenant agrees to vacate the premises early, any buyer will not be able to take occupation before the termination date of the lease, whether the transfer of the property has registered or not. You need to give the details of the lease agreement to your agent, as they must disclose this to the buyer.
- Expert advice? A 10% deposit, paid to Pam Golding, is necessary to secure the sale and shows proper intent on the part of the buyer.
- Period lapse. Expert advice? If there are any suspensive conditions in the agreement, such as bond approval, and the condition isn’t met within the stipulated time period, it becomes important that an addendum to the agreement is written up and signed before the agreement lapses. Why? If you allow the time to lapse and don’t document an extension of the period and a dispute arises, the buyer can cancel the sale at a later stage stating that the time period for bond approval had lapsed and that the sale was null and void at that point. Any changes to the offer at any time should be initialed by all parties.
You’re the Buyer
- Fixtures and fittings. Expert advice? If there are any fixtures and fittings that you’d like included in the sale, but aren’t sure if they are automatically included, then list these in the offer to purchase. Why? If they aren’t of a permanent nature, then the seller may not include them.
- Expert advice? If you’re purchasing a property and you like the interior, make sure you do a separate sale agreement for the furniture. Why? You save on transfer duty costs.
- Occupation date. Expert advice? Know the difference between the date of transfer and the date of occupation. They are not necessarily the same thing. The date of ‘registration of transfer’ is when the property is registered in your name and is legally yours. The occupation is simply the date you agree to occupy the residence. Why? You may have to pay the rates, municipal charges for utilities and levies (if sectional title) over and above the occupational rent from the date of occupation.
- Expert advice? Your deposit needs to be paid into Pam Golding’s trust account and any interest accrued is yours. Make sure that there is a clause in the sale agreement that states that the deposit will be returned to you (with interest) should any suspensive conditions, for example bond approval, of the sale not be met, and the sale therefor becomes null and void.
- Purchase price. Expert advice? Know whether or not the sale will attract transfer duty or VAT. Why? You pay VAT if the seller is VAT registered and the property forms part of a VAT entity. The purchase price clause should stipulate.
Knowing gives you power in the property world. Pam Golding, leading luxury real estate.
Posted by The Know - Pam Golding Properties