First-time homebuyers: Here's what to expect after signing the offer to purchase.
Category Residential Property
For first time buyers, signing an offer to purchase (OTP) can be both exciting and daunting. After the pen has left the paper, and the offer is accepted, the lengthy admin process can begin. But, when doing this for the first time, it can be tricky to know what to expect next.
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.
Pam Naidu, Director of Sales and Marketing at Devmco Realty, shared some key learnings, in an article published on 11 May 2023, which every first-time buyer should know when deciding to purchase their dream home.
1. Location, location, location! Also known as the Three L's:
There are three micro locations that define the actual location of a property on a macro level. If the property you want to purchase is in an estate for example, you may want to find out what area of the estate it sits in and what that actual area provides, such as a good sea views, etc.
2. Financial stability is important:
Get your credit card payments and debts in order.
3. Budget:
Establish a realistic budget to determine your affordability. Create a budget and try to stick to it so that you can enjoy the process and not put yourself under too much pressure.
4. Find a trustworthy real estate agent:
This is the person that will assist in picking out your potential home and exploring your new neighborhood and is also responsible for scheduling tours and negotiating important contracts on your behalf. Ensure that this is someone you trust, to have your best interests at heart.
5. Get approved:
Get a pre-approval letter before you start shopping! This will help you have realistic expectations on what you can afford.
6. Be mindful of transfer and closing costs:
First time buyers usually tend not to factor these costs in, and it comes as a huge surprise at the end. Doing your homework is a very vital part of house hunting.
Becoming a first-time homeowner can be an overwhelming experience and requires careful consideration of several factors. With the expert advice from Devmco Realty, first-time home buyers can make an informed decision and successfully unlock the door to their dream home.
If a deposit amount was agreed to, then Goslett explains that the buyer will also need to ensure that the transferring attorney (chosen by the seller) receives that money within the timeframe that was agreed to within the OTP.
Shortly after the OTP is signed, the transferring attorney will also get in touch with the buyer to ask for the various documents that are required in order for the property to be transferred into the new owner's name. At this point, the transferring attorney becomes the point of contact for any queries the buyer might have regarding the transfer process going forward and will typically share a timeline that will outline the various steps that need to be completed before transfer can take place. This includes everything from paying the transfer costs right up to signing the registration papers right at the end.
"The first few weeks after signing your very first offer to purchase might feel a bit overwhelming, but this is also where your real estate agent can prove very helpful. If you are ever uncertain about what is expected from you next, reach out to your agent and ask for guidance. As experts in the industry, a good real estate agent can provide some free advice and will be there to help you every step of the way," says Goslett.
Author: Property24
