More and more do we see the trend of “cash-buyers” purchasing properties (especially high end properties) for cash. In these difficult market conditions, one can easily be lured into chasing up a deal with a cash buyer. The fact that the banks are still reluctant to grant bonds (or at least 100%) means that way more OTP’s are signed but never come to fruition. I want to suggest a practical tip, which we can lend from the banks in dealing with developers. A qualified buyer is one that can put down a deposit. It does not have to be a huge deposit, it must just be something on acceptance of the agreement. That way you will know the purchaser’s intentions within 24 hours from signing the deal. This means that you do not lose 3 months in marketing the property, while the supposed purchaser drags you and the seller along.
Even in cases where one expects a 100% bond, would it be appropriate to call for a small deposit. Remember, that the Purchaser will in any event be responsible for the payment of Transfer costs, so they will need to have some cash available. In instances where one deals with a cash buyer (let’s say one of the R5mil or R6mil high flyers we have dealt with recently) it will still be appropriate to have a small portion of the money paid on acceptance of the agreement. All too often these purchasers drag on the sale by promising that the guarantees are on its way, or the money is on its way from abroad. How often do we not hear that the banks have caused delays and that “heads are rolling at the bank”? Make sure that the purchaser has some skin in the deal. Even, if it is only sufficient to cover the estate agent’s commission in the event of default. Don’t let the unscrupulous take control of your business and lure you into running around for months chasing a false dream.