Once you have narrowed down the search and found the ideal home, the next step is to put pen to paper and make an offer to purchase. While this may seem overwhelming at first, there are a few simple guidelines that will make it a far less daunting experience.
An offer to purchase is essentially an agreement that lays out the terms and conditions of the property transaction between the buyer and seller. All of the terms and conditions will need to be agreed upon by both parties before the contract is signed. It is imperative that everything that each party has agreed to is put in writing and listed in the document to avoid possible conflict further down the road. Once the agreement is signed by both parties, it is a legal and binding document.
An offer to purchase serves to protect the parties involved in the transaction and ensure that nothing is left to interpretation. If there is any ambiguity it could lead to conflict, so is best to be avoided. The offer to purchase must thoroughly cover all agreed upon terms, which should include issues such as the date of occupation, occupational rent, fixtures and fittings and the conditions of sale. If there is any clause that needs clarification, ask the agent for an explanation or obtain a professional opinion from a lawyer. Once the offer to purchase has been concluded and signed, it will become the deed of sale.
Each party must be in agreement as to what items are included in the sale of the property and what aren’t. As a general rule of thumb, any fixtures or fittings that are attached to the property (nailed, bolted, glued or screwed down) will stay.
It is fairly common for a buyer to submit an offer to purchase while they own another property. It is also common practice for buyers to include a condition which states they have submitted the offer subject to bond approval. In these situations, the offer to purchase will include suspensive conditions stating the sale is only subject to these conditions being met.
A suspensive condition will normally have a time limit that will depend on the agreement made between the buyer and seller. Once met, the estate agent should be notified without delay so that the agreement can be made unconditional. This step in the process is vital because it could become null and void and the whole transaction could fall through if the requirements have not been satisfied on time.
The offer to purchase must include the date of occupation, which stipulates the date on which the seller will vacate the property, and the buyer will take occupation. This will determine whether either party may need to pay occupational rent. The buyer will be required to pay occupational rent to the seller if they move into the property before it is registered in their name. Conversely, occupational rent will be paid to the buyer should the seller not be out by the time the transfer of ownership has occurred.
Once negotiations have ended, and the ink has dried on the document, the buyer’s deposit will be placed into an interest-bearing trust account until the transfer of ownership is complete. The interest on this account will be for the benefit of the buyer.
If used correctly, the offer to purchase will make the process of buying a home as easy and transparent as possible, assisting buyers and sellers to avoid any misunderstandings.
