Doing the deal

Private Property South Africa
Private Property Reporter

The art of making an offer on a home, negotiating the best deal and understanding the offer to purchase.


Before you decide on an offer, consider these questions

  • Is the home’s price in line with other similar properties in the area?
    If the home is priced higher then you might have more room to negotiate
  • How many other properties are there for sale in the area?
    You will be in a stronger negotiating position if there are lots of properties available than if they are scarce
  • Why is the current owner selling?
    If the need to sell urgently then they might be willing to accept a lower offer
  • How long has the property been on the market?
    The longer a property remains unsold the more willing a seller will be to negotiate.
  • Does the house need work and how much will that cost?
    You can use this to justify a lower offer
  • How good are your credentials as a buyer?
    If you don’t have to sell a property first and have a prequalified mortgage, then let the seller know as this puts you in a favourable negotiating position

Tip: Know your maximum budget from the start and stick to it. If the seller refuses to budge, then be prepared to walk away.


Putting in the offer to purchase Once you’ve decided on how much to offer, you need to formalise it with an offer to purchase.

The offer to purchase (OTP) is a valid contract relating to the sale of the property. It contains all the terms and conditions of the property transaction. An Offer to Purchase once signed by buyer and seller constitutes a deed of sale.

Tip: The OTP is a legally binding document once signed so it is advisable to get an attorney or your estate agent to go through the document with you and explain anything that you are unclear about.

A quick checklist when completing an offer to purchase:
• Check that the description of the property is correct (as described in the title deed).
• Are all the buyers' and sellers’ details documented clearly?
• Check that the purchase price is written correctly.
• Are you happy with the occupation date and occupational rent amount?
• Make sure you are aware of any special conditions and the time period in which these conditions need to be fulfilled, i.e. that the agreement is subject to a grant of the buyer's bond, or the sale of his other property.
• There may be movable items that can stay with the property. Are they all listed and are the movable items which are not included in the sale listed?
• Check that the estate agent's commission is correct (as agreed upon).


Need to know - The Voetstoets Clause

The voetstoets clause is still valid, in spite of the Consumer Protection Act (CPA).

The CPA does not apply to ordinary once-off property transactions between consumers. If a seller is not a developer (his ordinary course of business is not to sell property), then the CPA does not apply to the transaction.

The voetstoets clause provides a seller with a fair amount of protection against defects in the property. The buyer would only have recourse through the courts if they can prove that the seller was aware of the defects and failed to disclose them.

To protect yourself, as the purchaser, it may be worth having a property inspection company inspect the property thoroughly. The cost of the inspection will be for the purchaser’s account.

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