The house may have stolen your heart – but don’t let it steal your common sense!
You’ve found it. The kitchen is perfect, the garden is exactly what you imagined, the neighbourhood ticks all the boxes and you can already picture yourself putting your feet up on the patio.
Then comes the exciting moment:
“How much would you like to offer?”
Before you reach for the pen, take a breath.
An Offer to Purchase (OTP) is not simply a way of telling the seller that you’re interested. Once properly concluded, it becomes the contract governing the sale of the property. That means the clauses you skim over today could become very important tomorrow.
So, before you sign on the dotted line, here are 10 questions every property buyer should ask.
1. What exactly am I buying?
It sounds obvious, but make sure the property description in the OTP matches the property you think you’re buying.
Check the erf or sectional title details, address, unit number where applicable, and what is included in the sale.
If there are garages, parking bays, storerooms, solar equipment, pool equipment, curtains, appliances or other items that are part of the deal, make sure they are properly identified in the agreement.
If it’s important to you, don’t leave it to a handshake or a verbal promise. Put it in writing.
2. What does the title deed say?
A property’s title deed can contain conditions that affect how you may use the property.
There may be restrictive conditions relating to building, subdivision, use of the property or other matters that aren’t immediately obvious when you’re admiring the view from the lounge.
This becomes particularly important if your plans include extending the house, adding a second dwelling, subdividing the property, running a business or making some other significant change.
The City of Cape Town itself advises prospective buyers to check the validity of permissions and the restrictions affecting a property before purchasing.
Don’t just buy the property you see – understand the property you’re legally buying.
3. Is the property zoned for the way I intend to use it?
Perhaps you’re buying a house but plan to run a guesthouse.
Or you want to create a home office, add a second dwelling, operate an Airbnb or convert an outbuilding into accommodation.
Before assuming that your plans are permitted, check the property’s zoning and any necessary land-use approvals.
A property may be physically capable of doing something without being legally permitted to do so.
And remember: zoning isn’t necessarily the whole story. Title deed restrictions, heritage restrictions, HOA rules and sectional title rules may also affect what you can do.
5. Are there any planning or development applications that could affect my new home?
You may be buying a peaceful home with a beautiful view – only to discover six months later that a development application has been submitted for the vacant land next door.
Could the neighbouring property be rezoned?
Could additional units be built?
Is a road widening proposed?
Is there a subdivision, development or departure application nearby?
Cape Town’s planning records show how frequently applications for rezoning, subdivision, departures and removal of restrictive title conditions are submitted.
If the view, privacy or quiet surroundings are part of what you’re paying for, investigate what could change.
5. What am I actually going to pay – beyond the purchase price?
The purchase price is only one part of the financial picture.
Before signing, make sure you understand the likely costs of:
Transfer duty, where applicable
Conveyancing fees
Bond registration costs
Municipal rates and service charges
Levies, if applicable
Homeowners’ association fees
Insurance
Repairs and maintenance
Occupational rent, if applicable
Moving costs
A property that looks affordable on paper can feel very different once all the monthly and transaction costs are added together.
Your bond approval tells you what the bank is prepared to lend you. It doesn’t necessarily tell you what you will be comfortable spending.
6. What happens if my bond isn’t approved?
If you need a home loan to buy the property, pay very close attention to the suspensive condition relating to bond approval.
The OTP should clearly state the amount of finance required and the deadline by which it must be obtained.
Don’t simply assume that if the bank says no, the agreement automatically disappears.
The wording of the OTP matters.
A properly drafted suspensive condition can protect a buyer if the required financing is not obtained within the agreed period.
Know exactly what needs to happen – and by when – for your purchase to proceed.
7. What am I being told about the condition of the property?
South Africa’s Property Practitioners Act requires a completed mandatory disclosure form to be provided to a prospective purchaser and attached to the agreement of sale. The Act also makes it clear that buyers can conduct their own inspection of the property.
So don’t be afraid to ask questions.
Has the roof leaked?
Are there damp problems?
Have alterations been made?
Are there structural issues?
Have there been problems with plumbing, electrical installations or drainage?
And, importantly, don’t confuse the disclosure form with a professional inspection.
If you’re concerned about the condition of the property, consider having it inspected before committing yourself.
8. If it’s a sectional title or HOA property, what am I signing up for?
That beautiful apartment may come with a levy.
That dream estate may have strict architectural rules.
That townhouse may have restrictions on pets, parking, alterations, short-term letting or even the colour of your front door!
Before signing, ask for the relevant body corporate or HOA rules, as well as information about current levies and any known special levies or major projects.
A bargain purchase can become considerably less attractive if a large special levy arrives shortly after transfer.
Know the rules of the community you’re buying into – not just the rules of the house.
9. What are the occupation date and occupational rent arrangements?
When will you actually get the keys?
The date of occupation should be clearly recorded in the OTP.
If the buyer takes occupation before transfer, occupational rent may be payable to the seller. Conversely, if the seller remains in occupation after transfer, the agreement should clearly regulate that arrangement.
This is one of those clauses that can seem unimportant when you’re excited about buying your new home – until the transfer date arrives and everyone has a different understanding of when they’re moving.
Dates matter. Make sure everyone agrees on them before signing.
10. What happens if something goes wrong after I sign?
This may be the least exciting question on the list – but possibly the most important.
Read the clauses dealing with:
Breach of contract
Cancellation
Penalties
Deposits
Suspensive conditions
Fixtures and fittings
Occupation
Occupational rent
Default by either party
And don’t assume that you have a general “cooling-off period” simply because you’ve changed your mind.
Property agreements are serious legal contracts. The idea that you can simply sign today and cancel tomorrow because you’ve had second thoughts is a dangerous misconception.
If you’re unsure about a clause, ask before signing – not after.
One final question: “Have I had the chance to get advice?”
This might actually be the most important question of all.
An OTP is a legal document, and the time to ask questions is before you sign it.
Don’t be pressured into signing because someone tells you there are three other buyers waiting outside the front door. If you don’t understand a clause, ask for an explanation. If you want a condition included, make sure it is properly recorded in the agreement.
And if you’re unsure whether the property you’re buying is suitable for your intended use, investigate it before you become legally committed.
Your dream home deserves more than a quick signature.
Buying property is exciting. It can also be one of the biggest financial commitments you’ll ever make.
So admire the kitchen. Imagine the garden. Choose the room that’s going to become your study.
But before you sign…
Read the fine print. Ask the questions. And make sure you know exactly what you’re buying.
Because when it comes to property, the best time to discover a problem is before you own it.