You've found your dream home. Or you've found a buyer for your property. Now comes the moment that makes everything official signing the Offer to Purchase.
This document is one of the most important legal agreements you'll ever sign. It's not a preliminary document or a "letter of intent." Once signed by both parties, it becomes a binding contract that obliges the seller to transfer ownership and the buyer to pay the purchase price.
This guide covers everything you need to know about the Offer to Purchase what it is, what it contains, what to watch out for, and what happens after you sign.
What Is an Offer to Purchase?
An Offer to Purchase (OTP) sometimes called a deed of sale, sale agreement, or agreement of sale is the written offer made by a prospective buyer to acquire a specific property at a specific price on specific terms. It is signed first by the buyer and then submitted to the seller.
Think of it this way: The OTP is not a preliminary step. It is the contract itself. By the time your conveyancer opens a transfer file, every term of the deal is fixed in the four corners of that signed document. The conveyancing process that follows is the mechanical implementation of what the OTP already says.
Is the Offer to Purchase Legally Binding?
Yes. Once the seller signs in acceptance and that acceptance is communicated back to the buyer, the OTP becomes a binding contract of sale. There is no cooling-off period for properties above R250,000.
The legal basis: Section 2(1) of the Alienation of Land Act 68 of 1981 provides that no alienation of land shall be of any force or effect unless it is contained in a deed of alienation signed by the parties or by their agents acting on their written authority.
What this means in practice:
- An oral agreement to sell a house is unenforceable
- A handshake on the price is unenforceable
- Any amendment to the OTP must itself be in writing and signed by both parties
- A WhatsApp from the seller agreeing to extend a deadline is not, strictly speaking, a valid extension
Essential Information in an Offer to Purchase
A valid OTP must identify, with sufficient certainty, the parties to the sale, the property being sold, and the price being paid. Anything less and the contract fails for vagueness.
| Essential Term | What It Requires |
|---|---|
| Parties | Full names and South African ID numbers (or passport numbers for non-residents). For juristic persons: registered name, registration number, and details of the authorised signatory with the underlying resolution |
| Property | Description matching the title deed: erf number, township, registration division, extent in square metres, and existing title deed number. For sectional title: scheme name, unit number, and undivided share in the common property |
| Purchase Price | A fixed sum in South African Rand. A formula linked to a future event ("market value at registration") is risky and frequently challenged. State the price in numerals and in words |
| Occupation Date | The date the buyer takes physical possession. Often distinct from registration date |
| Signatures and Dates | Both parties must sign and date. Acceptance by the seller must be communicated back to the buyer for the contract to come into being |
Important: It is the conveyancer's job to verify these against the title deed but that verification happens after the OTP is signed. By that point, the bargain is fixed. The time to be careful is before the pen meets the paper.
Suspensive Conditions — The Safety Net
Most OTPs contain one or more suspensive conditions. Conditions that postpone the coming-into-being of the parties' rights and obligations until a specified event occurs.
Until the suspensive condition is fulfilled:
- The contract exists but is not enforceable as a sale
- If the condition is not met by the deadline, the contract falls away automatically
- The deposit is returned
- Neither party has liability
Common Suspensive Conditions
| Condition | What It Means |
|---|---|
| Subject to bond approval | The bank needs to approve the buyer's home loan within a stated period (typically 21 to 30 days). This is the most common suspensive condition |
| Subject to the sale of another property | The buyer must first sell their existing property to finance the new purchase. This is often paired with a 72-hour clause |
| Subject to a satisfactory property inspection | The buyer must be satisfied with the results of a professional inspection |
| Subject to approved building plans | The buyer must confirm that the property's building plans are approved and compliant |
The 72-Hour Clause (Marketing Clause): The seller can include a 72-hour clause in the OTP, especially when there is high demand. It allows the seller to continue marketing the property for back-up offers. Should the seller receive a better offer, they can activate the clause by notifying the original buyer. The original buyer then has 72 hours to comply with the suspensive conditions in their Offer to Purchase.
Resolutive Conditions — When a Binding Contract Can Be Undone
While suspensive conditions postpone the contract, resolutive conditions bring a binding contract to an end.
A resolutive condition is a condition that, if it occurs after the contract has become binding, terminates the contract and restores the parties to their pre-contract position.
Example: An OTP may contain a resolutive condition that allows the buyer to cancel the contract if the property inspection reveals defects that cannot be resolved to their satisfaction.
Special Clauses to Watch Out For
The Bond Approval Clause: When the OTP is subject to bond approval, the buyer must make a "diligent and reasonable" effort to secure the bond. The buyer must actively apply for the bond and cannot simply "forget" to apply or intentionally make a poor application to get out of the deal.
Important: Under the National Credit Act, a bank offering a home loan does not constitute the granting of a bond. It is only after you have accepted the terms and the bank issues a quotation and loan agreement that the bond has been granted.
Drafting tip: The bond clause should clearly state:
- The time period within which the bond must be approved
- What constitutes "approval" under the National Credit Act
- What happens if the buyer fails to make a diligent effort to secure the bond
The Occupancy Clause and Occupational Rent: The OTP must state both the occupation date and the occupational rent rate.
| Scenario | What Happens |
|---|---|
| Buyer moves in before registration | The buyer pays occupational rent to the seller (typically a market-related monthly amount) |
| Seller stays after registration | The seller pays occupational rent to the buyer |
The Deposit Clause: Most OTPs require a deposit (often 10%) to be paid into the conveyancer's trust account or the estate agent's trust account on signature. The deposit is not a legal requirement, but it does show the seller that you are a serious buyer.
Key points:
- The deposit is held in a trust account until transfer is complete
- The interest earned on the deposit belongs to the buyer
- If the deal falls through (subject to conditions), the deposit is refunded to the buyer
Estate Agent Commission: The OTP usually records that the seller is liable for the agent's commission, the rate (typically 5–7.5% plus VAT), and that commission is earned on registration. Both parties should know who is paying.
Voetstoots Clause: The voetstoots clause states that the property is sold "as is" with all defects, patent and latent. The buyer accepts the property with all its faults and defects.
Two kinds of defects:
- Patent defects: Defects that can be seen (broken window, visible leak)
- Latent defects: Defects that can't be picked up in a superficial inspection
Important: The seller cannot knowingly hide a latent defect. If you can prove the seller was aware of a latent defect without declaring it, you could have recourse but legal battles are expensive and emotionally draining.
Fixtures and Fittings: Anything that is not a standard fixture and is to remain (the gas hob, the wall-mounted TV bracket, the swimming-pool cleaner, the alarm) should be listed expressly in the OTP.
The distinction:
- Fixtures: Items fixed to a surface (shelving, blinds). These must remain in the house unless stated otherwise
- Fittings: Items not fixed (curtains, light fittings, chandeliers). These can be removed unless the OTP states otherwise
Defects Disclosure: Since 1 February 2022, the Property Practitioners Act 22 of 2019 requires every estate-agent-mediated sale to attach a mandatory disclosure form in which the seller lists known defects. Read it carefully what is disclosed becomes part of what the buyer accepts.
Cooling-Off Period — When You Can Change Your Mind
Section 29A of the Alienation of Land Act gives a residential property purchaser a 5-calendar-day cooling-off right but only where the purchase price is R250,000 or less.
Within five calendar days of signing the OTP, the buyer can revoke the offer or terminate the contract by written notice to the seller, no reason given, no liability incurred. Any deposit paid is refunded.
In practice: The threshold is so low that the right almost never applies. Properties above R250,000 have no statutory cooling-off period.
"I have five days to change my mind" almost always wrong. If your sale is above R250,000, there is no right to walk. Take legal advice before signing not after.
What Happens After Signing?
Once the OTP is signed by both parties, the process moves to the conveyancing phase:
| Step | What Happens |
|---|---|
| 1. Conveyancer appointed | Usually nominated by the seller |
| 2. Buyer applies for bond | If applicable |
| 3. Suspensive conditions fulfilled | Bond approval, sale of property, inspections, etc. |
| 4. Compliance certificates arranged | Electrical, gas, electric fence, water, beetle |
| 5. Transfer duty paid | To SARS (if applicable) |
| 6. Rates clearance requested | From the municipality |
| 7. Transfer documents prepared | By the conveyancer |
| 8. Deeds Office lodgement | Documents lodged |
| 9. Registration | Property transfers to the buyer |
Timeline: The process typically takes 6-12 weeks from signing the OTP to registration at the Deeds Office.
Want to understand the full journey? We break down exactly how long property transfer takes including common delays and what to expect at each stage.
Compliance Certificates
The OTP will specify which compliance certificates the seller must provide. These are a legal requirement for property transfers and must be arranged before transfer can proceed.
| Certificate | Required For | Notes |
|---|---|---|
| Electrical COC | All properties | Must be issued by a certified electrician; valid for 2 years |
| Gas COC | Gas appliances | Must conform to SANS 10087-1 standard |
| Electric Fence COC | Electric fence installations | Must comply with SANS 10222-3 standard |
| Water / Plumbing COC | Properties in Cape Town | Required under the City's Water By-Law |
| Beetle Certificate | Coastal regions | Not legally required but common practice, especially in coastal provinces |
Tip: It's advisable to have inspections conducted early in the selling process. If issues are found, repairs can be made without delaying the transfer. For a complete breakdown of each certificate and when it's required, read our guide on compliance certificates for buying and selling a house.
Seller's Obligations
As the seller, you have specific obligations once the OTP is signed:
| Obligation | What It Involves |
|---|---|
| Provide compliance certificates | Electrical, gas, electric fence, water, beetle (where applicable) |
| Disclose defects | Complete the mandatory defects disclosure form |
| Give 90 days' notice to your bank | If you have an existing bond |
| Provide all necessary documents | Title deed, ID copies, FICA documents |
| Settle outstanding rates and levies | Before transfer can proceed |
Need a full picture of what selling involves? Our complete guide to selling property walks you through every step from pricing and marketing through to transfer.
Agent Tactics — What to Watch Out For
Based on real-world experiences from buyers and sellers, here are some tactics to be aware of:
Pressure to Offer More: Agents work on commission. The higher the sale price, the higher their commission. While they are legally required to present all offers to the seller, they have an incentive to push buyers to offer more.
What to do: Stick to the price you believe is fair. If you're unsure, get a second opinion on the property's value.
Claims of "Another Offer": If an agent tells you there's another offer on the property, you are entitled to ask for proof. By law, all offers must be presented to the seller.
What to do: Ask to see the actual offer. If the agent is being truthful, they should be willing to share the details (with the other buyer's personal information redacted).
"Not Officially on the Market": Agents sometimes use this tactic to create a sense of urgency or exclusivity.
What to do: Ask for proof that the seller has authorised the agent to sell the property. Every agent must have a signed mandate from the seller.
Delaying Your Offer: It is not unknown for an agent to "forget" to forward an offer if they think it's too low. By law, they are required to present all offers to the seller.
What to do: If you make an offer, consider notifying the seller directly as well. This ensures the seller knows an offer has been made.
Checklist for Dealing with Agents:
- Ask to see the agent's Fidelity Fund Certificate (they are required to have one)
- Ask for proof of the seller's mandate (written authority to sell)
- Always put your offer in writing
- Keep copies of all correspondence with the agent
- If you suspect dishonest behaviour, report the agent to the Property Practitioners Regulatory Authority (PPRA)
Common Mistakes to Avoid
1. Not Reading the OTP Carefully
The risk: You miss a clause that you can't live with.
The fix: Read every clause. Read it twice. If you don't understand something, ask your conveyancer or attorney to explain it. Never sign under pressure.
2. Using a Generic OTP Template
The risk: Generic templates may not cover all the issues specific to your transaction.
The fix: Ask the agent for their standard OTP and have your conveyancer review it. You can use a different OTP, but make sure it covers all the essential terms and protects your interests.
3. Not Including All Conditions
The risk: You assume certain things are included or guaranteed.
The fix: If it's not in writing, it's not enforceable. Include every condition you need in the OTP.
4. Not Getting Pre-Approved Before Making an Offer
The risk: The buyer's bond application fails and the deal falls through.
The fix: The seller should check that the buyer has pre-approval (or proof of funds for a cash purchase) before signing. The buyer should get pre-approved before making an offer.
5. Not Verifying the Property Description
The risk: The property description in the OTP doesn't match the title deed.
The fix: Check the erf number, township, registration division, and title deed number against the actual title deed.
6. Not Checking for Amendments
The risk: Handwritten amendments are not signed by both parties.
The fix: All amendments must be initialled by both the buyer and the seller. If they're not, they are not enforceable.
7. Not Understanding the Consequences of Breach
The risk: You don't know what happens if either party defaults.
The fix: Read the breach clause carefully. Understand what penalties apply if you or the other party fail to fulfil your obligations.
- An OTP is a legally binding contract once signed by both parties — treat it seriously
- Suspensive conditions protect you — always include bond approval and/or inspection clauses
- The cooling-off period only applies to properties under R250,000 — there is no "buyer's remorse" protection for most properties
- Voetstoots means "as is" — but the seller cannot knowingly hide latent defects
- Amendments must be in writing and initialled by both parties — verbal agreements are unenforceable
- Agent commission is negotiable — don't be afraid to discuss it
- Get everything in writing — if it's not in the OTP, it's not part of the deal
- Consult a professional — have your conveyancer review the OTP before you sign
