The offer to purchase, often shortened to OTP, is the document that turns a verbal agreement into a binding contract. It's worth understanding exactly what you're committing to before you sign, rather than treating it as a formality.
It Becomes Binding Once Both Parties Sign
Once the buyer signs an offer and the seller accepts it in writing, it becomes a legally binding agreement of sale, not just an expression of interest. Walking away after signing, without a valid reason built into the agreement, can have real legal and financial consequences, including potential liability for damages if the other party suffers a loss as a result.
This is precisely why it's worth taking the document seriously from the start, rather than treating the signing moment as a formality that happens after "the real decision" was already made verbally.
Suspensive Conditions Matter
Most offers include suspensive conditions, most commonly bond approval by a specific date. If the condition isn't met by the deadline, typically the agreement falls away without penalty to either party. It's important the timeframes given are realistic, since an unrealistic bond approval deadline can leave a buyer scrambling or a seller stuck with a fallen-through sale.
Other common suspensive conditions include the sale being subject to the buyer selling their own existing property first, or subject to a satisfactory inspection report. Each condition needs a clear deadline and clear wording about what happens if it isn't met, since vague conditions are a common source of dispute later.
What's Included and Excluded
The OTP should clearly specify what's included in the sale, fitted appliances, curtain rails, garden sheds, and what isn't. Verbal assurances during a viewing don't count for anything once the transaction is underway, so anything agreed needs to be written into the document itself.
This is worth taking seriously even for small items. Buyers and sellers occasionally end up in disputes over things as minor as a curtain rail or a garden ornament, simply because it was assumed rather than written down. If it matters to you, list it explicitly.
Deposit and Occupational Rent
The OTP sets out any deposit required, how it's held, and the terms around occupational rent if the buyer needs to move in before transfer registers, or if the seller needs to stay on after transfer. These arrangements need to be spelled out clearly to avoid disputes later, including the daily or monthly rate, and what happens if either party's move-in or move-out date shifts.
Voetstoots and Property Condition
Most South African property sales include a voetstoots clause, meaning the property is sold as is, with the buyer accepting it in its current condition, defects included, except where the seller has knowingly concealed a defect. Understanding what this clause actually means for you is worth reading in full before signing, since it shifts risk in a specific direction.
Common mistakes buyers and sellers make with an OTP
A few patterns come up repeatedly and are worth watching for. Buyers sometimes sign before their bond pre-approval is confirmed, assuming financing will simply follow. Sellers occasionally accept an offer with a vague or unrealistic suspensive condition deadline, only to find themselves stuck waiting past a reasonable timeframe. And both parties sometimes rely on verbal side-agreements about fittings or timing that were never written into the document, which offers no legal protection if a disagreement arises later.
Read Before You Sign, Not After
An OTP is a legally binding document the moment it's accepted, so it's worth reading every clause properly, and asking your agent or attorney to clarify anything you don't fully understand, before putting pen to paper.
Frequently asked questions
Can I cancel an offer to purchase after signing it? Generally only if a suspensive condition isn't met by its deadline, or if both parties agree to cancel by mutual consent. Walking away without a valid contractual reason can expose you to legal and financial consequences.
What happens if my bond isn't approved in time? If bond approval is a suspensive condition and it's not met by the agreed date, the agreement typically falls away automatically, and any deposit paid is refunded, provided the condition was properly drafted.
Do I need an attorney to review the OTP before signing? It's not a legal requirement, but it's a sensible precaution, particularly for a first-time buyer or seller, or if the transaction has any unusual terms.
What's the difference between a deposit and occupational rent? A deposit is security toward the purchase price, generally held in trust. Occupational rent is a separate payment for the right to occupy the property before or after the official transfer date.
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Our agents will walk you through every clause in your specific offer to purchase, so you understand exactly what you're agreeing to before you sign.
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