After signing an Offer to Purchase (OTP) in South Africa, the process of buying a property moves forward. Here are the typical steps that follow after signing the OTP:
1. Acceptance and Communication: The seller will review the signed OTP and either accept it as is or may negotiate specific terms. If there are any counteroffers or amendments, the parties will communicate until both buyer and seller agree on all the terms and conditions.
2. Payment of Deposit: The buyer is required to pay the agreed-upon deposit, usually held in trust by the transferring attorney or estate agent. The deposit amount is typically a percentage of the purchase price, as specified in the OTP.
3. Home Loan Application: If the buyer is financing the purchase with a home loan, they need to apply for the loan through a bank or other financial institution. The bank will assess the buyer's creditworthiness, and if approved, issue a loan offer. You can streamline this process by getting prequalified for a home loan.
4. Property Transfer: The transferring attorney starts the property transfer process. They will obtain various certificates and documents required for the transfer and registration of the property. The buyer will be responsible for certain costs, such as transfer fees and conveyancing fees.
5. Property Inspection: The buyer may conduct a property inspection or valuation to ensure the property is in the expected condition and value.
6. Fulfillment of Conditions: If there are any conditions or suspensive clauses in the OTP, such as obtaining a home loan or selling an existing property, these conditions need to be met within the specified timeframe.
7. Finalizing the Sale: Once all conditions are met, the transferring attorney will prepare the necessary documents for the property transfer and registration.
8. Transfer and Registration: Both the buyer and seller, or their appointed representatives, will meet at the Deeds Office to sign the necessary documents. The property is officially transferred to the buyer, and the title deed is registered in their name.
9. Payment of the Purchase Price: On the day of registration, the buyer is required to pay the balance of the purchase price to the transferring attorney. The attorney will distribute the funds to the seller, settling any outstanding amounts and fees.
10. Taking Possession: After registration, the buyer takes possession of the property as per the agreed-upon occupation date.
It's essential to work with experienced professionals such as estate agents, attorneys, and financial advisors during this process to ensure a smooth and legally compliant property transaction.