An offer to purchase, sometimes called a sale agreement, is a legal document that you sign when you want to buy a property. It becomes a legally binding contract once it has been signed by both the buyer and seller and contains important details and conditions relating to the sale of the property, such as:

• the description of the property,
• the purchase price,
• the seller’s and buyer’s personal details,
• any special conditions,
• the date of occupation and occupational rent if applicable, and
• any fixtures and fittings included or excluded from the sale.

Do you need an offer to purchase to apply for a home loan?

Yes, you (and any co-applicants, when applicable) must provide the following documents when applying for your home loan:

• A valid South African ID or valid passport,
• Your latest 3 months’ payslips or other proof of income,
• Your latest 3 months’ bank statements, and
• A signed copy of the offer to purchase or sale agreement.
  
  

What if I change my mind about buying the property?

Once you’ve signed the offer and it’s been handed over to the seller, the seller must decide whether to accept or reject your offer. They may also choose to counter the offer and try to negotiate different terms.

The offer becomes an official, legally binding document as soon as the seller signs and accepts your offer. It is possible to withdraw from this contract, but there are often financial penalties attached. When drawing up an offer, the buyer can add a clause that allows them to be released from the contract, provided that they pay the seller a ‘roukoop’. This is an amount sufficient to serve as a consolation for the owner if the buyer withdraws from the sale.

What is the agent’s responsibility?

All registered estate agents must follow a set of rules, regulations and guidelines put in place by the Estate Agency Affairs Board, including complying with the Code of Conduct for Estate Agents.

The agent is responsible for making sure that the offer to purchase is at a reasonable and fair price, in line with the asking price and current market value of the property. The agent will pass the offer onto the seller. All offers must be made in writing – verbal agreements are not accepted.

The agent should also disclose all information that may affect the value of the property, such as any known faults or defects. This will allow for a fair and just offer that both the buyer and the seller can agree on.

Tips for the buyer

• Make sure that your finances are in good standing before you go house-hunting. Preapproval will let you know what loan amount you could qualify for so you can set your budget.
  
  
• Read the offer to purchase carefully before signing it.
  
  
• Sign only when you and your co-applicants (if applicable) are certain that you want to buy the property.
  
  
• If unsure of anything in the offer, ask a trusted adviser or the estate agent to explain it until you’re satisfied you understand.

Tips for the seller

• Use a trusted estate agent and conveyancer to sell your home.
  
  
• If you intend to sell your home and you still have an outstanding balance on your home loan, you need to give your bank 90 days’ notice as soon as you decide to sell to avoid paying an early-termination fee.
  
  
• The early-termination fee (often referred to as ‘90-day notice’) is prescribed by the National Credit Act, 34 of 2005. It makes provision for a bank to charge a fee if you cancel the home loan before the end of the agreed loan term. The early-termination fee is 3 months’ interest based on your outstanding balance, interest rate and remaining loan term.
  
  
• If the home loan is cancelled before the 90 days, you will be charged a pro rata amount of the termination fee for the remaining days. However, if the bond is cancelled 90 or more days after you have given notice, you won’t be charged an early-termination fee. Your notice may be valid for a year, and if you do not close your home loan account or sell your home within this time, you will have to give 90 days’ notice again.
   

Did you know that on average, Nedbank pays out around R1.8 million a month in cash back on home loans? In 2023, we paid out more than R20 million in cash back on home loans. For an affordable home loan tailored to your circumstances and value-added extras like up to R20,000 cash back and a 50% discount on your attorney bond registration fees, choose the bank that’s best for your money.