From Offer to Ownership – Tips for a Watertight Property Purchase
The decision to buy or sell a home is an emotional and often life-changing moment and the last thing you need is to have the sale fall through because of incomplete paperwork or a low credit score.
03/11/2025
The decision to buy or sell a home is an
emotional and often life-changing moment. As
much as it signifies a substantial long-term
investment, it can also take an emotional and
mental toll on both parties. The last thing you
need after spending time doing the legwork to
find your dream home is to have the sale fall
through because of incomplete paperwork or a low
credit score. Even when an Offer to Purchase has
been signed, it is not guaranteed.
Buyers
and sellers can both encounter pitfalls that
could cause a transaction to derail. After all
the searching, comparing and careful budgeting,
no buyer or seller wants to watch the process
fall apart. BetterBond’s National Head of Sales,
Bradd Bendall, suggests ways in which both the
buyer and seller can ensure that their sale goes
through as smoothly as possible.
Ditch the DIY
Partner with experts from the start
to ensure that you are properly advised at every
step of the homebuying journey. “A bond
originator can advise on what documents you
need, what credit score will put you in the best
position to secure finance, and help you
calculate what you can afford to pay for a
home,” explains Bendall.
Most homebuyers
rely on finance to buy a home, which means they
must apply for a bond to finance the purchase
over time. “If a potential buyer’s home loan
application is denied because of affordability
issues, a deposit shortfall or credit concerns,
the sale will fall through.” Sometimes there is
a shortfall between the value of the bond that
is approved and the actual purchase price of the
home. If the buyer is unable to make up that
shortfall, the sale will likely stall.
Be prepared
You can help mitigate this risk by
first getting pre-approved for a bond. This can
be done online at any time and at no cost. The
bond application process is very similar because
it requires the same documents – for example,
your ID, proof of residence, income tax number
and proof of funds. It therefore streamlines
this aspect of buying a home. “If your
pre-approval is declined, BetterBond can help by
advising on how to improve your credit score, or
how much deposit you need to save to qualify for
a bond,” explains Bendall.
Pre-approval
places a buyer in a far better position when
negotiating an Offer to Purchase, as it signals
serious intent and improves the likelihood of
bond approval. Bendall says clients who are
pre-approved through BetterBond achieve a 95%
approval rate on their applications.
Factor in a deposit
“Having a deposit also
shows the seller that you are a serious buyer,
and it will improve your chances of securing a
bond at a better interest rate,” says Bendall.
It’s advisable to put down a deposit of at least
10%, if possible. Being able to offer some form
of deposit will affect the gross household
income required to qualify for a bond. A deposit
can also make a significant difference when
banks decide whether to approve or decline a
bond application.
Submitting an Offer to
Purchase that is too low could leave the seller
feeling short-changed, resulting in the sale
falling through. “The offer must feel fair to
both parties to ensure a successful outcome.”
Often, the property sale is conditional on the
buyer first selling their current home. If this
does not happen within the stipulated time, the
initial offer will lapse and the sale will not
proceed.
Consider the conditions
A
buyer purchasing a plot to build a new property
should check the required timelines. When buying
in a development, there could be a restriction
that requires the building to be completed
within a set period of time. If the building is
not completed during this period, the buyer
could be subject to penalty levies and buy-back
clauses that allow the developer to reclaim the
plot.
Suspensive conditions are
requirements that must be met for the sale to go
ahead. Bond approval is the most common
condition, but these may also relate to the
removal of unapproved structures on a property
or the passing of certain inspections. The sale
will often only proceed once these conditions
have been met.
Market research
Buyers
must do their due diligence before submitting an
Offer to Purchase. Understand the market to
gauge a fair price for a property in your
preferred area and talk to estate agents in the
area to get a sense of average house prices.
It is also helpful for a potential buyer to
know how much they can afford. Use tools such as
BetterBond’s online calculators to see what you
can offer a seller before starting negotiations.
This will help ensure that the sale does not
fall through later in the process.
Seller setbacks
A sale may fall through if the
seller fails to complete agreed-upon repairs or
changes. Compliance is also non-negotiable, and
the seller is legally required to secure
electrical, gas, plumbing, electric fence and
other compliance certificates before transfer
can take place. “If this is not done within the
required timeframe, the buyer can withdraw or
negotiate. If no agreement is reached, the
transaction could collapse.”
The seller
should also have all the necessary documents in
order, such as title deeds and building plans.
All structures on the property need municipal
approval, advises Bendall. “If it is discovered
that there are illegal structures or unapproved
changes to the property, this could cause delays
and potentially incur demolition costs. A buyer
may choose to withdraw from the sale rather than
wait for these issues to be resolved.”
The buyer is also entitled to withdraw from a
sale or renegotiate the price if, during an
inspection, they come across undisclosed
defects. Disputes may arise, which could
jeopardise the transfer of the home. “Sellers
are advised to be transparent about any
potential issues with the property that could
deter the buyer from going through with the
purchase.”
From offer to ownership,
proper preparation and market research can make
all the difference, concludes Bendall. “When
buyers and sellers understand the process, have
their paperwork in order, and work with trusted
professionals, the risks of a sale falling
through are significantly reduced.”