As the offer stands: Note this in an offer to purchase (OTP)

Anybody who has been in the market for purchasing property is likely familiar with the feeling of euphoria when you find the property that meets your needs in the area of your choice and within your price range. And then the realisation that there are probably at least three other buyers with their sights on this property, which means you need to sign that offer to purchase asap!

But not too fast, warns Giel Viljoen, Principal at Leapfrog Stellenbosch. Or not until you fully understand that the offer to purchase is a legally binding document. "It's something that we can never emphasise enough - once your signature is on the offer to purchase, you are contractually obliged to honour the terms of the agreement so it pays to ensure you're comfortable with all the terms and conditions outlined in this document," he explains.

Essentially the offer to purchase is a powerful show of intent to purchase, and an important step in the property buying process. 

"It's always great to see how excited buyers are to sign the OTP - and sellers to receive an OTP - and to ensure a pleasant experience for both parties it is crucial that some of the key stipulations in the agreement are well understood," Viljoen says. 

To this end, Viljoen's advice is to pay particular attention to the following terms: 

Purchase price 

Obvious perhaps, but the purchase price is the most important part of the agreement as it represents the buyer's commitment to purchasing the property at the specific price stipulated in the document. 

The OTP must also stipulate when the seller must accept, reject or negotiate the offer. A counter offer  is in effect a rejection of the purchasers offer.

For the sake of clarity and transparency, reference should also be made to the agent's commission. 

Conditions of sale 

"The conditions of sale is where things can get tricky which is why you want to work closely with a property professional to ensure all parties are clear on what it entails," Viljoen advises. 

Conditions of sale are the terms that make provision for the different "subject to sale" clauses, for example subject to bond approval or subject to the sale of another property.

Once either of the conditions have been met, the onus is on the buyer to notify the property agent so that the purchase process can be set in motion. 

Fixtures and fittings 

When it comes to fixtures and fittings there is some room for interpretation which is why 'rather safe than sorry' is a good approach to take in terms of stipulations in the offer to purchase. 

Don't assume anything when it comes to fixtures and fittings, don't assume anything - rather ask, make sure and note in the agreement. 

The rule of thumb is that fixtures - thus things that are fixed, like safety gates, security bars on the windows and air conditioning units - remain attached to the property, while things that are more moveable like garden pots, window dressings like curtains, and mirrors, for example, are not included. 

Occupation date 

The occupancy date must be agreed by the buyer and seller. It is, as the term suggests, the date on which the seller vacates the property and buyers occupy the property. 

It's helpful to agree to it as early in the process as possible, but preferably on a date on or after registration (or at least after suspensive conditions have been met) so that both parties can make the necessary arrangements around the actual move.

Occupational rent 

The occupational rent clause comes into effect when the occupation date does not coincide with the registration date in order to compensate the owner of the property when the other party occupies the property.

Thus occupational rent is simply the payment for occupying a property before or after the official transfer.

The industry standard is for occupational rent to be market related but buyers and sellers are free to negotiate that price, and commit it to the agreement in writing. 

Paper trail 

"My advice to both buyers and sellers is always to get whatever is decided in writing, and then to ensure that all parties are clear on the interpretation. And please don't rely on WhatsApp messages or voice notes!" Viljoen says.