Critical steps after your offer to purchase is accepted
Getting an Offer to Purchase on your dream home accepted by the seller is a major milestone when buying a home, but it is only the first step in closing the deal. Samuel Seeff, chairman of the Seeff Property group warns that the period between signing the contract and finalising the transfer is governed by specific terms, and navigating these requires prompt action and strategic preparation.
Most real estate sales agreements are subject to suspensive conditions, which are specific clauses that must be fulfilled for the contract to become legally binding, he says. Two of the most common conditions are securing a mortgage loan or selling an existing property.
Seeff says there are essentially six vital steps to ensuring that you don’t lose out on the property:
Step 1 – The first step is securing a home loan prequalification before beginning your house hunt. A formal prequalification gives a clear understanding of your borrowing capacity and identifies potential credit issues early on.
Step 2 - The second step is assembling the required financial documentation such as proof of income, bank statements, and identification documents in advance. This ensures that when your offer is accepted, your formal bond application can be submitted immediately, avoiding delays that could cause suspensive conditions to lapse and void the deal.
Step 3 - The third step applies if your purchase is contingent on selling your existing property. Ideally, your house should already be on the market, or if not, it should be listed immediately and priced accurately based on realistic market valuations. Overpricing leads to extended time on the market which will endanger your new purchase if the seller grows impatient.
Step 4 – The fourth step is ensuring you are completely ready to buy when you submit your offer, with funds and admin aligned so no administrative hurdles stall the process. This includes having the cash ready for a deposit if required as well as the funds to cover all of the transaction costs.
Step 5 - The fifth step is maintaining total financial stability and keeping your credit record completely clean. You must avoid taking on any new loans, credit cards, or large credit purchases until the property is officially transferred into your name. Financial institutions may conduct a final credit check before the property is transferred and any negative change to your credit score or debt ratio may risk the bank withdrawing the loan approval.
Step 6 - The sixth step is to ensure you actively manage the legally binding terms and potential competing buyers during the conditional period. An Offer to Purchase cannot simply be cancelled without legal grounds. Offers with conditions such as a mortgage loan or sale of another property usually include a 72-hour clause allowing sellers to continue marketing the property. If an unconditional offer comes in, you will typically have only 72 hours to waive your suspensive conditions or the offer will lapse.
Once your offer is accepted and all suspensive conditions are fulfilled, the contract becomes unconditional and enters the formal conveyancing phase. The transfer attorney gathers documents, requests rates clearance certificates, and coordinates with the bond attorneys while you sign transfer documents and settle conveyancing fees, transfer duty, and bond costs.
Once guarantees are lodged, the documents are submitted to the Deeds Office for final examination and registration. This final stage typically takes between two to three months, provided there are no administrative delays, culminating in the official transfer of ownership into your name.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the process of buying your first home can sometimes feel quite overwhelming. “There is a lot of paperwork to get through before you can start thinking about the actual move to a new home,’ he notes.
After signing the OTP, the first hurdle buyers will face is waiting to hear if the seller will either accept or counter their offer. “When signing the OTP, the agent will usually state a timeframe for how long the seller has to respond to the offer. If this time lapses before the seller responds, you can either decide to extend the offer by a few days or you could choose to cancel the offer entirely,” Goslett explains.
He adds that there are three possible outcomes after submitting an OTP: “the seller will either (a) accept the offer as it stands, (b) they might counter the offer with a higher price or some other suspensive condition, or (c) they could simply reject the offer completely. If the seller counters the buyer’s initial offer, the buyer can decide whether to accept the higher price or enter into price negotiations. Alternatively, the buyer can simply deny the counteroffer and move on with their property search.”
If the offer is accepted, the next step would be to fulfil any suspensive conditions. For first time buyers, this usually means getting their finances together. “Those who are purchasing through the help of a home loan will be given a timeframe (usually about two weeks or so) to secure the required financing.
