The Offer To Purchase

If things do not go smoothly, this document can be used to sue either party that breaks the agreement. It is quite common in the real estate business to give out offers and counter offers until both parties agree on a compromise. Once there is a consensus, it is then put in writing as an offer to purchase.

In the notes below, you will discover what is an offer to purchase and why you need it. The following 5 explanations can help you understand this piece of document more and why you need to put more importance into it.

Condition of Sale

A condition of sale is a part of the offer to purchase that states that the sale or agreement can be suspended if conditions of the contract are not met. This can be used in case of a delay in proceedings that are neither party's fault. For example, if the bank is taking forever to process documents, you can temporarily stop the transaction till the bank gets its act together.

Fixture and Fittings

This clause of the offer to purchase indicates what fixtures or fittings on the property are included in the sale. It also states which fixtures or fittings will be removed and not included in the sale.

Deposit

A deposit is usually required in any transaction. It is a sign of good faith and commitment to the agreement. The amount of the deposit should be stated in the offer to purchase and held in a trust account that can earn interest. It will be held in that account till the official transfer of property to the buyer. The buyer will also receive the interest earned from the deposit.

Voetstoots

The voetstoots means that the seller is not liable to repair or fix any damaged structures in the property after ownership is transferred to the new owner. If the buyer wants the defects fixed then they will have to agree on this before finalizing the offer to purchase contract. The amount of repair or renovations should be written in detail in the agreement.

State Possession Clearly

This is the part of an offer to purchase that involves a lot of misunderstandings and headaches. You are supposed to be very specific with the possession date. If it isn't stated clearly with an exact date on the contract, there will be a tendency for either party to be confused about when the buyer actually became the legal owner of the property and when the old owner ceases to be responsible for it. The date is usually never specific on the contract and will lead to disagreements between buyer and seller later on if problems arise.