Offer to purchase question

[zerocool2009]

My understanding is that the bonds offered by the banks are for the full amount, however no idea regarding interest rates, terms, etc. But I imagine the banks feel he can afford it or they wouldn't offer.


I have already asked my wife to ask the agent but thought I'd see if anyone has experienced this and what we can do if they don't sign their bond.


My understanding is that the otp is only forfeited if they fail to finance ie no approvals.
According to lawyer, multiple bonds have been received and buyer just needs to sign one.
That's why I'm asking what recourse we have if the buyer doesn't sign the bond.
Otherwise what is the point of otp's if there are no repercussions for buyers signing willy nilly.

What I have learned in time over all the years, my first special condition in an otp “if the bank dont grant me a favorable interest rate to my liking, I dont accept it”.

Thats means, even if I get a bond, I am not caged in.

Did you bought privately? (Without an agent)

 

[vigras rojara]

What I have learned in time over all the years, my first special condition in an otp “if the bank dont grant me a favorable interest rate to my liking, I dont accept it”.

Thats means, even if I get a bond, I am not caged in.

Did you bought privately? (Without an agent)

He's the seller.

Any seller who accepted an offer as vague as you mentioned above (regarding the interest rate) would have been exceptionally ill advised.

 

[tRoN]

If the bond/s have been approved within the stipulated time period and for the minimum amount as stated in the OTP, then that suspensive condition has been fulfilled.

As long as nothing was added regarding maximum interest rates or some other weird clause, the bond clause would be deemed to have been "tacitly fulfilled" and the buyer can be sued for performance.

The conveyancing attorneys should be leaning on him.

Is there never a cooling off period given to be able to cancel a sale?

What “weird clause” can be added for a suspensive condition.

 

[Caldo]

If all conditions has been met on the OTP and the buyer is still delaying unnecessarily without reason, you can sue for bridge of contract.

The question is, is it worth the effort?
It might be easier to just relist the property again.

 

[zerocool2009]

He's the seller.

Any seller who accepted an offer as vague as you mentioned above (regarding the interest rate) would have been exceptionally ill advised.

Not really. My motto is prime less 2% for rates. Been long enough in this game to know: how the buyer can benefit the most

 

[Steamy Tom]

If all conditions has been met on the OTP and the buyer is still delaying unnecessarily without reason, you can sue for bridge of contract.

The question is, is it worth the effort?
It might be easier to just relist the property again.

maybe breach of contract

 

[zerocool2009]

If an agent was involved, call him, if not, read the otp (conditions to get granted bond (and show proof of principle)). Otherwise, relist

 

[Caldo]

maybe breach of contract

Hahahaha... That is funny... My English has failed me... But lets leave it like that and call it art...

 

[zerocool2009]

If all conditions has been met on the OTP and the buyer is still delaying unnecessarily without reason, you can sue for bridge of contract.

The question is, is it worth the effort?
It might be easier to just relist the property again.

The issue is, you dont know if the buyer is vrot (as in cant get credit/a bond).

I am sure after 21 days the buyer need to say whats his position in/on the otp.

Rule 1: always go back to the otp (whats was said and agreed)

 

[vigras rojara]

Not really. My motto is prime less 2% for rates. Been long enough in this game to know: how the buyer can benefit the most

Well then you could state in the bond clause that you require an interest rate of prime less 2% in order to proceed.

To work it along the lines of "an interest rate acceptable to the buyer" would really convey on you an option to purchase as you could refuse to accept any interest rate no matter how low.

As a seller that wouldn't be acceptable to me.

 

[derp90]

2 offers were submitted on a house asking 2,800,000

1: R2,700,000

Required 90% bond
Clauses included: home inspection and approved plans

2. 2,650,000

Required 75% bond
No clauses included

Sellers accepted offer 2 because it requires a smaller bond and there were no clauses.

My questions:

- Everything tells you to require a home inspection and approved plans, but this was a deciding factor for the sellers, they wanted an easier sale. In the case when there are multiple offers, should you remove those clauses to stand a better chance?

- Did they also accept the slightly lower offer because they felt the people would get a bond more easily? I didn't know that the deposit size would sway a buyer so much.

Trying to understand so I don't lose out next time.

 

[Steamy Tom]

2 offers were submitted on a house asking 2,800,000

1: R2,700,000

Required 90% bond
Clauses included: home inspection and approved plans

2. 2,650,000

Required 75% bond
No clauses included

Sellers accepted offer 2 because it requires a smaller bond and there were no clauses.

My questions:

- Everything tells you to require a home inspection and approved plans, but this was a deciding factor for the sellers, they wanted an easier sale. In the case when there are multiple offers, should you remove those clauses to stand a better chance?

- Did they also accept the slightly lower offer because they felt the people would get a bond more easily? I didn't know that the deposit size would sway a buyer so much.

Trying to understand so I don't lose out next time.

No one can tell what was going through their heads for sure but I think your assumptions are correct, easier quicker sale. Maybe they even know something is off plan for example, for R50k on such a large amount seems like a no brainer, who knows how much of that 50k they even lost as maybe they clawed back some on the agents commission.

 

[derp90]

No one can tell what was going through their heads for sure but I think your assumptions are correct, easier quicker sale. Maybe they even know something is off plan for example, for R50k on such a large amount seems like a no brainer, who knows how much of that 50k they even lost as maybe they clawed back some on the agents commission.

I'm not 100% sure the amount was exactly 50k, but I do know the other offer was less but with almost no conditions.

 

[Forza]

I'm not 100% sure the amount was exactly 50k, but I do know the other offer was less but with almost no conditions.

Less clauses means the seller potentially has less issues with the sale of the property. Based on the house inspection, buyer#1 might want to pull out of the sales, this potentially means that the seller loses out on the potential sale by buyer#2 if they have found another house. Although it is reasonably accepted to indicate that, some sellers want the "easiest" route rather with less effort.

Regarding deposit, maybe the seller is of the opinion that seller#2 chances to get the bond is more likely than seller#1 as this obviously plays a factor once a bond is requested from the various finance houses.

 

[derp90]

Less clauses means the seller potentially has less issues with the sale of the property. Based on the house inspection, the buyer#1 might want to pull out of the sales this potentially means the seller loses out on the potential sale by buyer#2 if they have found another house. Although it is reasonably accepted to indicate that, some sellers want the "easiest" route rather with less effort.

Regarding deposit, maybe the seller is of the opinion that seller#2 chances to get the bond is more likely than seller#1 as this obviously plays a factor once a bond is requested from the various finance houses.

Do you think, if you want a house, that it's better to leave out the home inspection clause if there are other offers? Everything I read says that it's a necessity, but maybe one should only include it if there are no other offers on the table.

 

[3WA]

Do you think, if you want a house, that it's better to leave out the home inspection clause if there are other offers? Everything I read says that it's a necessity, but maybe one should only include it if there are no other offers on the table.

It’s nice to have peace of mind. Buying a house is a big commitment, and for me, big commitments must be made with as little risk as possible. I’d rather miss the house and find another than skip the home inspection.

 

[Forza]

Do you think, if you want a house, that it's better to leave out the home inspection clause if there are other offers? Everything I read says that it's a necessity, but maybe one should only include it if there are no other offers on the table.

Definitely not, indicate it in the OTP as it is necessarily to do proper due diligence yourself.

Alternatively try to have the house inspection arranged prior to signing of the OTP.

Each seller is different, so don't assume that all sales will be the same. Those conditions you indicate is definitely needed.

 

[derp90]

Definitely not, indicate it in the OTP as it is necessarily to do proper due diligence yourself.

Alternatively try to have the house inspection arranged prior to signing of the OTP.

Each seller is different, so don't assume that all sales will be the same. Those conditions you indicate is definitely needed.

I wouldn't want to fork out the home inspection cost beforehand each time I tried to buy a house -- that could rack up especially if there's no guarantee you'll get it.

 

[Forza]

I wouldn't want to fork out the home inspection cost beforehand each time I tried to buy a house -- that could rack up especially if there's no guarantee you'll get it.

Agreed therefore it is best to just indicate such in the OTP and leave it up to the seller to accept.

Again, it is based on what will give you peace of mind. i.e Leaving it in the OTP vs Omitting is from the OTP vs paying it beforehand hoping that you will buy the house. Based on the scenario's, there is less risk to you by just leaving it in the OTP and bearing that cost after the seller accepts the OTP.

 

[Aeryn23]

2 offers were submitted on a house asking 2,800,000

1: R2,700,000

Required 90% bond
Clauses included: home inspection and approved plans

2. 2,650,000

Required 75% bond
No clauses included

Sellers accepted offer 2 because it requires a smaller bond and there were no clauses.

My questions:

- Everything tells you to require a home inspection and approved plans, but this was a deciding factor for the sellers, they wanted an easier sale. In the case when there are multiple offers, should you remove those clauses to stand a better chance?

- Did they also accept the slightly lower offer because they felt the people would get a bond more easily? I didn't know that the deposit size would sway a buyer so much.

Trying to understand so I don't lose out next time.

I would NEVER remove that clause as a buyer. If the seller has a problem with the clause, then walk away. Chances are, they may have something to hide.