7 . Verify Levies and Rates
If the OTP provides for it , ensure that the levies , rates , and taxes communicated to you are correct and that you ’ re comfortable with them . Unexpected increases in levies or municipal rates can impact your cash flow and affect the profitability of your investment . Be proactive in obtaining confirmation of these figures from the seller or their agent .
8 . Remove unnecessary sale of second Property Clauses
In most OTPs , there may be provisions for the sale of a second property to make the transaction viable . If this is not applicable to your situation , make sure to cross it out . Leaving unnecessary clauses in the OTP can create confusion and potential legal issues down the line .
9 . Ensure Occupational Rent Is market-related
Occupational rent is the rent paid by a seller ( or buyer ) if they occupy the property after the OTP is signed but before the transfer is finalized . Ensure the occupational rent is market-related — whether it ’ s in your favour or the seller ’ s , you want to ensure fairness and avoid unnecessary costs . If the seller wants to stay on the property after the sale , ensure the rent covers your bond repayment and any other associated costs .
10 . Clearly define Fixtures and Fittings
Fixtures and fittings can cause disputes if not clearly stipulated . Be specific inyour OTP about which fixtures and fittings — such as light fittings , appliances , or blinds — are to remain with the property . Anything that isn ’ t nailed down should be agreed upon in writing . A common mistake is assuming these items come with the property , only to find out after transfer that they ’ ve been removed .
11 . Set a reasonable time for the offer to be irrevocable
Give the seller a reasonable time frame in which the OTP remains irrevocable — typically three to five working days . This allows you some flexibility if you need to submit multiple offers on different properties without locking yourself into any single deal for too long . However , don ’ t leave it too short , as the seller may feel pressured and reject your offer altogether .
12 . Complete the information sheet and include supporting documentation
In most cases , the agent will request an information sheet where you need to enter your personal details and submit supporting documentation , such as proof of funds or pre-approval letters . Ensure you have all these documents readily available to avoid delays . Having everything organised shows that you are a serious buyer and can sometimes give you a competitive edge in a multipleoffer situation .
13 . Be prepared to walk away
No matter how emotionally attached you become to a property , always be prepared to walk away if the terms don ’ t suit your investment strategy . Investment decisions should be based on numbers and logic , not emotions .
By keeping these guidelines handy and applying them diligently , you ’ ll soon become an OTP-completing machine , ready to build your property empire with confidence and clarity !
50 REI MAGAZINE OCTOBER 2024