Can you continue marketing a property after accepting an OTP?
Category Property Tips
A question which often arises is whether a seller can continue marketing their property after accepting an Offer to Purchase (OTP). The answer depends on the TYPE of offer received.
An OTP is a legal agreement. Thus, if there are no conditions to be fulfilled such as the need to first secure finance or sell a property, and the seller accepts the agreement, then it is usually quite straightforward and binding.
There would therefore be no need for any further marketing of the property and the seller certainly cannot entertain a second offer as this would be a breach of the original agreement of sale which will attract legal action and financial consequences.
When can marketing continue after accepting an OTP?
The opportunity to continue marketing a property after accepting an OTP is usually only in the case where the offer is subject to certain "suspensive conditions" which would need to be fulfilled to validate the agreement.
Such conditions usually relate to where the purchaser needs to secure finance in the form of a mortgage loan to cover the purchase price in part (or in full in some instances). A second or alternative condition could be where the purchaser needs to first sell another property.
The "72-hour clause"
An important clause in any OTP, is what is referred to as the "72-hour clause" or the "Continuing Marketing clause".
This enables the seller to accept the OTP while still able to continue marketing the property. Should the seller receive a second OTP with better terms, i.e. no finance needed or already approved and no property to sell, then the purchaser will then be given written notice to either fulfil or waive the suspensive condition/s to proceed with the sale within a 72-hour period. If unable to do so within the period, the seller can then cancel the agreement and accept the second OTP without any consequences.
This provides the seller with a level of comfort to know that should a better offer come along, they can benefit from it. If the first purchaser is unable to comply, the seller is then free to accept the second offer.
Home is our Story and property our passion. Despite the recent interest rate hikes, the Cape Town property market continues its resilience. Although slightly higher, the interest rate and bank lending conditions remain favourable for the market. There are still plenty of opportunities for sellers, but ensure you choose an experienced local area agent for the best marketing and advice.
With over five decades of expertise as a market leader, the Seeff Property brand continues to deliver property success for buyers and sellers. If you would like to talk about current opportunities in the market, please feel free to contact us at any time.
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Author: Gina Meintjes
