The Offer to Purchase (OTP): Your Property Deal Starts Here
When buying or selling property, one document stands at the center of the entire transaction and that is the Offer to Purchase (OTP). It forms the foundation of the entire transaction, setting out the terms , conditions and expectations for both buyer and seller.
In the excitement of securing a property or the fear of losing out, many buyers feel pressured to sign quickly, often without taking the time to fully understand what they are agreeing to. Sellers, on the other hand, may feel financial pressure to sell quickly or may already have committed to another property subject to the sale of their current home. This is where costly mistakes and unnecessary frustration can arise, but with the right guidance, they can be avoided.
What is an OTP?
An Offer to Purchase is a legally binding agreement between a buyer and a seller that sets out the terms and conditions of a property sale. It is not just an "offer" the buyer provides, once signed by both parties, it becomes a valid and enforceable contract.
This means:
The buyer is committing to purchase the property under agreed terms
The seller is committing to sell under those same terms. Should the seller wish to change or add any terms, the amended offer must be presented to the buyer for acceptance. Only once both parties agree to the same terms, does it become a valid and binding offer.
What Does an OTP Include?
A well-drafted OTP will typically cover the following where applicable:
Purchase price
Deposit
Bond approval conditions
Suspensive conditions
Occupation date and occupational rent
Compliance certificates
Special conditions
72-Hour Clause
Fixtures and fittings included in the sale
Mandatory disclosure form
The importance of the Offer to Purchase is often underestimated, yet it plays a vital role in the success of the transaction. It helps protect both buyer and seller by clearly setting expectations, reducing the risk of misunderstandings and outlining the key timelines that guide the process. When everything is clearly defined, the journey is far smoother. But if details are overlooked or not properly agreed upon, it can lead to delays, frustration or even a deal falling apart.
Practical Tips for Buyers and Sellers
Read every clause carefully
Ask questions if anything is unclear
Be clear on what is included in the sale
Don't rush, once signed, it is binding
Ensure your financial position is secure before signing
Taking the time to understand the terms upfront, can prevent costly mistakes and ensure a smoother and more predictable journey for everyone involved.
Need Guidance?
Navigating an OTP can feel overwhelming, but you don't have to do it alone. We're here to guide you through every clause, every condition and every step of the process so that you can move forward with confidence. Reach out to us today for professional guidance.