PART:1
Completing the first Offer to Purchase is daunting for most first-time buyers. So how can you best handle this matter? The most important step in a negotiation is planning your strategy before you meet with the property practitioner to discuss an offer.
This is according to Laurence van Blerck, a property practitioner at RealNet Platinum, who says decide on your opening offer price and set a limit on your highest price, always taking into account your deposit, approved bond amount, transfer, and bond costs.
Apart from price, the clauses which are the most important are as follows:
- Voetstoots
- Occupation, Possession and risk, Fixtures and fittings.
- Title Deed
- Building plans
- Dates
In this guide, for first-time buyers, we will discuss each point.
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Voetstoots
“There are so many factors that require the buyer’s time and attention that it’s easy for something to fall through the cracks, but one issue that should not get lost in the shuffle is accurately determining and evaluating the condition of the house you are looking to buy,” says Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg.
“All too often, buyers discover unpleasant ‘surprises’ about their new homes within months or even weeks of moving in and even in cases where they do have recourse, it’s a stressful situation best avoided.”
Odendaal says that it’s important for buyers to understand the types of defects that there could be as well as disclosure obligations on the part of the seller.
There are two types of defects:
1. Latent defects to the property are those which cannot be seen with the naked eye or after a fair inspection has been made.
2. Patent defects to the property are those which can be seen with the naked eye or can be established after a reasonable inspection of the property by the purchaser.
“The purchaser has a legal obligation to conduct a thorough inspection of the property before making the offer to determine the presence of patent defects to the property and address them in the offer to purchase.
“In the event that patent defects are not addressed in the offer to purchase, the seller has no legal obligation to attend to the repair thereof.
“The voetstoots clause is included in the majority of sale agreements and its purpose is to protect the seller against liability for any latent defects to the property unless the buyer can prove that the seller implicitly had prior knowledge thereof and attempted to conceal or hide the defect from the purchaser.”
An additional layer of protection for both parties as well as the estate agent is the condition report which is essentially a document wherein the seller sets out the general quality of the property and lists all existing defects.
“The condition report usually refers to factors such as the condition of the roof, swimming pool, foundations and structure and electrical and plumbing systems, all of which can cause costly headaches down the line,” says Grahame Diedericks, Manager Principal in Midrand for the group.
“It should always be regarded as a red flag if a seller refuses to sign such a report and, if the buyer is still very keen to buy the home, he/she should commission an independent home inspection before making an offer to purchase.”
Voetstoots: This clause informs the purchaser that he/she is buying the property “as it stands”, for example, with all its existing defects. The first step is to ensure that the property practitioner has provided you with the Mandatory Disclosure of property defects before you discuss the Offer. This disclosure form (now a legal requirement) is not a guarantee nor a warranty that there are no other defects, so you must carry out your own property inspection.
An additional layer of protection for both parties as well as the estate agent is the condition report which is essentially a document wherein the seller sets out the general quality of the property and lists all existing defects.
“It should always be regarded as a red flag if a seller refuses to sign such a report and, if the buyer is still very keen to buy the home, he/she should commission an independent home inspection before making an offer to purchase.”
Diedericks offers the following guidelines:
1. Obtain and review the condition report before submitting or making an offer to purchase
2. Check the date on the report
3. Be wary of “repaired” defects
4. Share the report with your home inspector and/or attorney
5. Ensure you understand the limitations of the condition report
Article courtesy of property24
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