Home transactions - Demystifying the OTP
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The prospect of buying a new home can be a daunting task and can cause anxiety just thinking about it. That's why our agents are expertly suited in assisting you when making the most important decision of your life.
With interest rates at an all-time low, now is one of the best times to upscale your property needs or finally put an offer down on your dream home. Follow our guided homeowner's process to ensure a smooth transaction and a happy future.
Understand your requirements and limits
Your first thought needs to be focused on what your financial limits are. Having a sound understanding of your credit facilities is an invaluable personal finance asset. Other important factors to consider are the locations you want to live in, the access it has to services like schooling and medical facilities, your desired size and outdoor requirements, do you want to live in a complex or a suburb?
Once you are sure about your requirements this is where the fun begins. Our team of real estate experts can guide you through a selection process. Go on a journey of home discovery until you finally stumble upon your dream property. At that stage, you're halfway done.
The OTP
OTP or Offer to Purchase refers to the final agreement which you and the owner of the home you're buying have settled upon. This agreement encompasses the terms and conditions of the sale such as, agreed selling price, fixtures and fittings to be sold with the home, agreed occupation dates, and any rent due.
The following five pillars denote the most important aspects of an OTP. The more familiar you become with these pillars the easier the buying process becomes.
Selling conditions
Usually relying on the financial position and bond approval of the buyer, as well as the possibility of the home purchase hanging on the sale of another property. These stipulations are in place to ensure the smoothest process of ownership transferal and to avoid last minute disputes.
Purchase price
Probably the most important part of the OTP is the purchase price offered. This needs to have a time frame allocated, giving the seller an option to accept, negotiate, or reject within that time.
Fixtures and fittings
Were you sold on a property after seeing that hallway chandelier set off the entire home? Well, it's important to make sure that it doesn't go with the sellers! Not exactly sure what will stay and what goes? The general rule of thumbs is that anything that is fixed to the wall or ceiling usually stays. There may be some room in terms of blinds and curtains but always make sure that everything is recorded in writing to avoid being let down when you finally move in.
Date of occupation
This is the date on which the home becomes vacant or the previous owners need to vacate the premises for the new owner to move in. Whatever you do, make sure that this is settled way in advance and that both parties are in full agreement on this date. Like in the above pillar, be sure to have this in writing.
Occupational rent
Simply put, occupational rent refers to paying for staying on a property that is not yours. It may be the case that for whatever reason, the buyer may need to move into the home sooner than expected or that the seller may need to stay on longer. In the case of this happening, occupational rent needs to be paid by the party that no longer owns the property to the party that does or vice versa, where you could still be awaiting transfer.
Be cautious, take your time, leave no room for errors
There is a sense of urgency that comes with finding that dream property. You become anxious and simply want to sign the offer as quickly as possible. Although yes, moving quickly is good, understanding that the OTP is a legally binding contract requires patience and a methodical approach.
You are making one of the most important decisions of your life. Be careful not to fall prey to mistakes made out of urgency. Take your time, know your limits, know the legalities and never backtrack, as you do not want to find yourself in breach of contract!
To contact us, follow the link: https://www.homesofdistinction.co.za/
To contact one of our Real Estate Agents, follow the link: https://www.homesofdistinction.co.za/agents/
Author: LV Digital
