Signing an offer to purchase (OTP) may feel like the finish line, but there is still a significant amount to do before the keys are finally handed over. These can include bond approvals, legal processes, paperwork and payments.

This period spans anywhere from three to four months and it’s important to remember that the decisions made can have financial consequences.

Buyers Trust CEO Jackie Smith echoes this sentiment, adding that she believes that while the period between having your offer accepted and taking ownership can feel like a ‘waiting game’ – particularly for first-time homebuyers who haven’t been through the transfer process before. Smith believes it’s actually a time where staying financially savvy and proactive can make a meaningful difference.

“Once the OTP is signed, some homebuyers may feel the urge to sit back and wait, but the reality is that there is still a lot to do. It’s a crucial time to set yourself up for success and plan ahead.”

5 common pitfalls to avoid

Smith highlights five common mistakes buyers should avoid while waiting for transfer to take place:

1. Making big purchases before understanding all the costs of transfer

“It’s easy to get excited about the move and start spending money on the new home straight away,” she says.

However, Smith advises buyers to avoid committing too much of their available money before they have a clear picture of all the costs still to come. “Depending on the transaction, there may be transfer-related costs, moving expenses and other unexpected expenses that need to be accommodated before and immediately after taking ownership,” she says.

Smith says keeping money in reserve provides buyers with breathing room should an unexpected cost arise. “This is also why it makes sense to ensure that money already set aside for the purchase, such as your deposit, is working as hard as possible while you wait. Maximising the interest earned on that money can help contribute towards the additional costs that come with buying a home.”

2. Assuming a long transfer process is always bad news

Few things will test a homebuyer’s patience quite like waiting for transfer. “Once you can picture yourself living in the property, every additional week can feel like a setback. But a longer-than-expected transfer doesn’t automatically mean something has gone wrong.”

Property transfer involves several parties and processes, and the timing can be affected by various delays – from meeting the conditions in the sale agreement and securing bond finance to obtaining the documentation and clearances needed for registration.

“Buyers should stay informed about the reasons for a delay, but additional time doesn’t necessarily mean the transaction is in trouble,” says Smith, adding that for those waiting, a silver lining is that deposits placed in interest-bearing accounts can continue earning interest during this period.

3. Focusing on your home loan interest rate – but not your deposit’s

While homebuyers spend considerable time trying to get the best interest rate on a home loan, what’s often overlooked is the interest that their deposit is earning while waiting for transfer.

“Deposits are hard-earned money, often saved over months or even years, and they should be treated with the same care and attention as any other investment,” says Smith.

She adds that deposits can sit in an account for around three to four months and over this time, they should be earning interest. “This often-overlooked interest can act as a nice financial buffer – especially with all the costs associated with homeownership.”

While some homebuyers may still be encouraged to transfer their home deposits to a conveyancer or estate agent, platforms such as Buyers Trust offer an alternative. “It’s important to remember that a homebuyer will only receive the interest on their deposit when placed with conveyancers or estate agents if this is specified in the sales agreement.”

The question of how deposits are held has also recently come under renewed scrutiny in South Africa, following a property dispute heard by the Supreme Court of Appeal (SCA).

Attorney Richard Spoor highlighted a matter involving a buyer who had paid a deposit into a conveyancing attorney’s trust account, with the agreement providing that the money was to be held in the buyer’s name and for their benefit in an interest-bearing account. The sale subsequently fell through after a suspensive condition was not fulfilled, leading to a dispute over entitlement to the deposit and accrued interest.

The matter has raised important questions about the legal treatment of deposits paid into attorneys’ trust accounts and the wording of the underlying sale agreement. The SCA had not yet handed down its decision at the time of writing.

“With this in mind, it’s vital to understand exactly where your money is being held, what the OTP says about it, who is entitled to the interest and what is supposed to happen to the deposit if the transaction does not proceed,” says Smith.

When money is transferred directly in a traditional manner, there is also the risk of phishing and email interception scams. “Buyers Trust offers a secure, audited and bank-integrated platform. The account earns interest at a rate linked to the prevailing lending rate, with the net interest accrued being paid to the buyer at the end of the investment period. Buyers can also access account information and statements detailing the interest earned.”

4. ‘Switching off’ and missing important deadlines

Once an offer has been accepted and the home loan has been applied for, it’s common for some buyers to think that all the admin on their side is complete. However, Smith says that this is not the case. 

“The OTP can contain important dates and conditions, while conveyancers, banks and other parties may require documents, signatures, FICA information or payments from the buyer as the transaction progresses,” she says.

“One of the best things a buyer can do during this stage is remain contactable and responsive. Read requests carefully, understand what is required from you and respond promptly. You don’t want an avoidable delay because a document or signature has been sitting in your inbox.”

Smith adds that using a platform such as Buyers Trust can also help keep track of the payment requirements linked to their OTP. “Having support to ensure payment deadlines are met, while receiving updates as the transaction progresses, can take some of the administrative pressure out of the process and give buyers greater visibility over their money.”

Smith says that first-time buyers also shouldn’t be afraid to ask questions. “If you don’t understand what you’re being asked to sign, pay or provide, ask for an explanation rather than making an assumption.”

5. Budgeting for a home purchase but not homeownership

Beyond the costs associated with purchasing and moving into the property, buyers need to consider what the home will cost them each month to run and maintain. Depending on the property, this could include rates and levies, insurance, utilities, security and ongoing maintenance.

“Buying at the absolute limit of what you can afford can make the first few months of homeownership very stressful,” says Smith. “Your budget shouldn’t end on transfer day. Before you take ownership, work out what your new monthly household expenses are likely to look like and make sure you have room for the unexpected too.”

Making the waiting period work for you

The time between signing an offer and receiving the keys may be less exciting than finding the property, but it remains an important part of the homebuying journey.

For Smith, the overarching lesson is to stay engaged with both the transaction and your money.

“Buyers put enormous effort into saving a deposit, finding the right property and securing a home loan. That same financial awareness should continue right through to transfer. Know where your deposit is, understand what it is earning, stay on top of the process and make sure you’ve budgeted for what comes next,” she concludes.

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