If you're buying or selling a home, a very common term you'll hear is "OTP", or, "Do you have a signed OTP?". "We need the OTP".
What is an OTP? OTP stands for "Offer To Purchase". Let's say you're selling your home for a million Rand, and I offer to buy it, but at R900,000. I give you an OTP, an offer to purchase.
You might hear somebody say, we got in two offers on our house. Now we need to decide which one. So you got two OTP's or two offers to purchase. One person might have said, "look, you're selling for a million, my offer is R900,000". The other person might say, "my offer is at R920,000 and I need you to paint the wall before I buy it".
There's an agreement that's made in this offer to purchase. It's also called a "sales agreement". OTP, sales agreement. Both are words that are used for the same thing. Now you might get many OTP's until you find one offer that you like and you say, "Yeah, I want to sell to this person with these terms". Now you have a signed OTP. And now the sale can go ahead.
I hope that that makes sense and that clarifies that term. When we do bridging finance, we need a signed OTP to make sure that there's actually a sale and actually a deal going ahead.
Gal Ezra,
Managing Director,
Empower Funding