SHOWING ARTICLE 67 OF 83

WHAT YOU SHOULD KNOW IF YOU ARE THINKING OF BUYING OR SELLING PROPERTY.

Category Property News

WHAT YOU SHOULD KNOW IF YOU ARE THINKING OF BUYING OR SELLING PROPERTY.

Educating buyers & sellers is equally as important as educating estate agents believes Rob Mckee, an associate of Knight Frank Garden Route, who is a professional real estate educator and has been involved in the real estate industry for over 30 years.

It is all very well attempting to educate estate agents, but what about educating buyers and sellers who, need expert guidance when undertaking such large financial investments.

The sad reality is that there are so many unqualified "agents", many with limited or no formal real estate training, that taking advice from such individuals could be likened to dealing with an unqualified doctor with similar results.   

Add to the mix, a stagnant property market, expropriation without compensation, rampant corruption, crime, ever increasing living costs, Eskom, Brexit, service delivery problems, tight bank lending criteria, and one can empathise with buyers and sellers not knowing which way to turn.

The following "point by point" details will be of value to any potential buyer or seller.

What then are the "basics" both buyers and sellers ought to know about?

  • Regardless of the size of a property the same principles apply when buying or selling.
  • "Supply" and "demand" regulate the industry and there is never a perfect balance - so either buyers or sellers are calling the shots." In an oversupply cycle the buyer is "King" and when stock is in short supply sellers are in the pound seats.

Preparing to sell?

  • You may be "willing and able" to sell but what if the property is co- owned? (A classic example arises in divorce situations when one wants to sell and the other not.)   
  • Is the property in the best possible state of repair and are all electrical plumbing and gas installations in perfect working order?  
  • If the property is tenanted, remember that the lease trumps the sale. Does the tenant have a right of first refusal, and will they frustrate the sale?    
    • Do you have the title deed, occupation certificate and council approved as built plans for your property?
  • Should I try and sell it myself, (not a good idea) or what type of mandate should I grant?
  • Do I understand the pro's and cons of the various types of mandate before I sign? My advice is that if there is a FINITE DATE by when the property has to be sold, appoint the most qualified agent available.
  • If you are genuine and serious seller a sole mandate is a must.
  • As agents only earn commission on transfer of a property, they will focus their attention far more on what is referred to a "Real Sellers" than those where no urgency to sell applies; "if I get my price", "thinking of making a change", "house getting to big" etc.
  • Never even consider excluding any buyer on the basis of their race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth" as this is in contravention of the constitution and no agent is permitted to accept a mandate with such directives being imposed.
  • Another crucial factor that sellers often don't take into account is that before transfer can take place, the tax affairs of both parties must be in order - so best to sort these issues out before attempting to buy or sell!
  • If you are a non- resident seller and the purchase price exceeds R 2m a withholding tax will apply.

What's my property worth?

  • Not what you as the seller think it's worth!
  • Not what your friends say it's worth!

A property is only worth what a willing and able buyer is prepared to pay for it under current market conditions and at "arms- length"

The danger of overvaluing

Invariably, the longer a property remains on the market unsold, the lower the eventual price achieved.

This applies nationally and probably the hardest concept for sellers to accept

Time on the market versus buyer activity 

  • "Hot buyers" want to view new listings as soon as possible - hence the higher the level of activity which is experienced as soon as a new listing hits the market.
  • Activity drops off over time as buyers may consider it to be overpriced or problematic 
  • Nationally it can now take anywhere from 1 day to 3 years to sell. Get the price right at the outset.   

Why agents often overvalue

  • To secure the mandate at any price - a contravention of the estate agents code of conduct  
  • To satisfy sellers aspirations 
  • Simple ignorance 

Common Misconceptions

  • Advertised prices are the prices actually attained
  • "We can always come down in price"
  • "It's cheap for overseas buyers"

Mandates

No agent can market a property without specific authorisation by the owner or duly appointed representative.

  • "Verbal mandates" - problematic should disputes arise
  • "Authority to sell" - in writing and better than verbal
  • "Open or joint" - in writing but granted to more than one agency
  • "Sole" - seller still retains the right to sell personally
  • "Exclusive mandate to sell" - sellers rights to sell excluded

Tips for sellers when the property is on the market for sale

  • Ideally leave the house when buyers are viewing
  • Make sure the house is in the best possible condition before all viewings
  • Insist on the names of all buyers that have viewed the property.  This is important should a claim of double commission arise.
  • Don't attempt to deal with the buyer directly
  • Insist the agent gives you adequate warning before viewings
  • Insist on regular feedback

   

Tips for buyers when ready to buy

  • Undertake a thorough inspection of the new property 
  • Be prepared to compromise
  • If at all possible - "Cash is King"
  • Do thorough research on property prices in the area.
  • Don't make "stupid" offers
  • Consider security issues       
  • Know why the seller is selling
  • Consider the area from a future selling perspective
  • Ask about planned development in the area
  • Ask how long the property has been on the market
  • If there are things to be done, negotiate to reduce the price and do it yourself
  • Unless there are good reasons not to, make the expiry period as short as possible.
  • Get a bond pre- approval if applicable
  • Provide your FICA documents to the agent on request.
  • If the property is tenanted ask for a copy of the lease
  • If the sale of your property is "subject to the successful conclusion" of the sale of the buyer's property, make sure you know about the terms of that sale and what it realistically should achieve.
  • Don't try to meet the seller in an effort to close the sale
  • If you can't raise a minimum (10%) deposit you will in all likelihood not get a seller to accept your offer
  • Don't try to get your attorney to effect transfer - the risk of the sale is that of the seller
  • If you are a first- time buyer, ensure you deal with an experienced agent       

Views expressed above are those of Rob Mckee and are offered in an attempt to assist buyers and sellers in general.

Should however material issues arise during the buying / selling process it is always advisable to seek legal advice sooner rather than later.

Rob Mckee is a professional real estate educator and associated with the newly established Knight Frank branch on the Garden Route

For more information contact Rob Mckee at  Robertmckee664@gmail.com   or +27 82 468 8970

Author: Helen Ward

Submitted 27 Apr 19 / Views 1978