What does "Caveat Emptor" mean?
It is a Latin term that means "let the buyer beware". Similar to the phrase "sold as is" or sold "voetstoots", this term means that the buyer assumes the risk that a product may fail to meet expectations of have defects.
One has to be very sure that buyers and sellers are fully informed by their agents of what is described in the agreement of sale, says Gerhard van der Linde, Managing Director of SEEFF Pretoria East. There is nothing more exciting than getting the keys to your first home, but make sure you thoroughly understand the offer to purchase before you sign it.
Far from being simply an agreement, an offer to purchase is a binding contract. Once you have made an offer and it has been accepted, it is not easy to change the terms of the agreement afterwards (although it can be done in writing if agreed to by both buyer and seller.)
Van der Linde offers the following advice:
- Understand everything you are signing. Pay special attention to the section in the agreement that lists the fixtures and fittings that are attached, which items that are to be excluded from the sale. Do not assume that everything you see is included (fixtures to the property are usually included), but if there is any uncertainty, then rather specify the items that you need certainty about.
- Request the property condition report which should be attached as an addendum to the agreement of sale and note what disclosures have been made by the seller.
- If there is an undertaking by the seller to repair anything, make sure that the agreement clearly spells out what has to be repaired, at who's cost and by when the repairs must be finalised.
- Make sure that your finances are in order. Obtain a pre-approval from a bond originator. This makes your offer significantly stronger when it is presented to the seller. Also ensure that the agreement you sign clearly indicates if the purchase of the property is linked to the sale of another property.
- Understand what the meaning of a suspensive condition is. If your transaction is subject to the approval of a mortgage bond, you should allow enough time to obtain the approval of the bond.
- Often sellers will insist on having the right to proceed with the marketing of the property until the suspensive conditions have been fulfilled. Ask your agent to clearly explain the implications of such a condition.
In conclusion Van der Linde says that the services of a knowledgeable and reputable property consultant will go a long way in giving peace of mind when concluding such an important transaction.