How will you as the seller know if a buyer makes a genuine offer and it will be acceptable by the banks

Lake Properties                       Lake Properties

    

Lake Properties                       Lake Properties

Here’s a more detailed explanation on how you, as a seller, can evaluate whether a buyer’s offer is genuine and likely to be accepted by the bank—especially in the South African property context:

---

🔍 1. Pre-Approval Letter (Proof Buyer Can Afford the Property)

Before making an offer, serious buyers often get pre-approved for a bond. This means a bank or bond originator has assessed their creditworthiness, income, and affordability.

Why it matters:

• A pre-approval letter shows the buyer has already qualified in principle for a bond up to a certain amount.
• It gives you confidence that the buyer is not "just testing the waters" and is financially ready to buy.

✅ What to do: Ask the buyer or agent for a copy of the pre-approval letter before accepting the offer.

---

💰 2. Deposit Proof (Shows Commitment and Capability)

Buyers in South Africa often pay a 10% deposit, although this amount can vary. A genuine buyer should have this deposit readily available, either in cash or easily accessible savings.

Why it matters:

• If the buyer has no deposit, it may signal that they’re over-stretching financially.
• A deposit reduces the loan amount needed and shows they are serious and financially stable.

✅ What to do: Ask for proof of funds (e.g., a bank statement or confirmation from their attorney or bank that funds are available).

---

📄 3. Suspensive Conditions in the Offer to Purchase (OTP)

An Offer to Purchase (OTP) usually includes suspensive conditions, especially if the buyer is applying for a bond. The most common condition is:

"This offer is subject to the purchaser obtaining bond approval for the full purchase price within 30 days."

Why it matters:

• If the buyer doesn’t get bond approval within the stated time, the sale automatically lapses.
• This protects you from being locked into a sale that’s not going anywhere.

✅ What to do:

• Insist on a specific timeframe for bond approval (e.g. 21 or 30 days).
• If time passes with no update, ask your agent or conveyancer to follow up or cancel the offer.

---

🧾 4. Valuation and Market Value Considerations

Banks will not approve a loan for more than the market value of the property. Even if the buyer offers more, the bank’s valuation will cap the bond amount.

Why it matters:

• If the buyer over-offers to beat competition or to impress, but the bank values the home lower, the buyer will need to pay the shortfall in cash.
• If they can’t, the deal may fall through.

✅ What to do:

• Be cautious of unrealistically high offers. Ask whether the buyer can cover any shortfall in cash if the bank doesn’t approve the full loan.

---

📞 5. Involve a Bond Originator or the Agent

A bond originator works with buyers to get them the best deal from various banks. They often have insight into whether the buyer’s financial standing is solid and whether approval is likely.

Why it matters:

• Originators deal with the banks daily and can often give you informal feedback on whether the buyer is likely to succeed in getting finance.

✅ What to do: Ask the originator or estate agent what they know about the buyer’s financial background (with the buyer’s consent).

---

🕒 6. Use a 72-Hour Clause (to Protect Yourself)

If you accept a conditional offer (such as “subject to bond approval”), include a 72-hour clause.

How it works:

• If another buyer comes along with a better or cash offer, you can notify the first buyer.
• They then have 72 hours to make their offer unconditional (e.g. provide bond approval) or step aside.

✅ What to do: Ask your estate agent or conveyancer to include a 72-hour clause if you're worried about getting locked into a weak offer.

---

🧠 7. Gut Feel + Professional Advice

Sometimes, red flags appear in how the buyer behaves:

• Hesitant to share proof of funds
• Unwilling to stick to deadlines
• Offers significantly above asking price with no deposit

Your estate agent or conveyancing attorney can help assess the risk.

---

Summary: How You Know It’s a Serious, Bankable Offer

Indicator	What It Shows
✅ Pre-approval letter	Buyer likely qualifies for a loan
✅ Deposit proof	Buyer has cash and is serious
✅ Reasonable offer price	Banks likely to approve the bond
✅ Clear suspensive clause with time limits	You’re not locked in if finance fails
✅ Communication via bond originator	Financial process is moving forward
✅ 72-hour clause	Flexibility to take better offers

Lake Properties                       Lake Properties