11 of Property Sellers Most Frequently Asked Questions
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1. When is the best time to list a house for sale?
As soon as you decide to sell it.
If you want to get the best price for your house, the key is to give yourself as much time as is reasonably possible. However, a house that remains on the market for a long period of time due to overpricing becomes shop soiled and invariably sells for less; so avoid the pitfall of pricing.
Periods characterized by low interest rates and great demand are naturally very favourable. If property sales are expected to plummet, it may be sensible to bring forward the date on which to list a house for sale.
2. What if I can't sell my old house before I buy? Should I rent my house?
Consider the advantages and disadvantages of renting out your old house. If you're being transferred, you may be able to obtain a short-term rental while you're becoming familiar with the new area.
Either way, a local estate agent can usually help, by advising you how much rental you can expect to pay in your new city, or what you need to charge to cover your bond payments and other costs that will be incurred as a landlord of a rented property.
3. What is the difference between fair market value and asking price?
Generally speaking, owners determine their asking prices based on the price they paid, transfer costs, improvements and a large profit. In many cases these asking prices are set too high. It must always be taken into consideration that a property is a long-term investment.
A Comparative Market Analysis (CMA) needs to be done to determine fair market value, as this is the highest price a buyer is willing to pay.
The asking price may then be set slightly higher than fair market value to afford room for negotiation. This will then be the price at which the home is advertised.
4. Should I be flexible about the asking price?
A certain degree of flexibility is usually called for on the part of both the buyer and the seller.
While it is ultimately your decision to accept or reject an offer, or present a counter offer, a good agent can be a great assistance to you during the negotiating process. In fact, negotiation is one of the valuable skills an agent can offer you.
As negotiations proceed, whether in writing, face-to-face, or by phone, your agent should advise you of your options in responding to each offer from the buyer.
5. Is it possible for an estate agent to influence the selling price considerably?
The estate agent is in a position to reach a larger number of potential buyers by means of an effective marketing strategy. The more buyers, the better the chances of selling, and the higher the selling price.
Some estate agents have access to more sales channels than others namely:
- advertisements in local, regional and national newspapers;
- presentations at the office, e.g. photo portfolios;
- arranging show days television advertising
- Broad-based website and property portal advertising
It is sensible to ask the estate agent for a written explanation of his price assessment, such as the Comparative Market Analysis provided by a Chas Everitt estate agent.
6. Is it possible for estate agents to reach different assessments of value?
The answer is “yes”. However, if a large number of similar houses have been sold in a given area little discussion will remain regarding the value of such homes. A decrease in property market activities, however, will make the value assessment of a home more difficult.
A Chas Everitt estate agent will provide the seller with a Comparative Market Analysis which incorporates all known comparative information. This method clearly shows how the value of a home is determined.
7. Should I choose an agent based on the price he/she quotes?
One of the greatest mistakes sellers make is choosing an agent who agrees to the highest price. All the exposure in the world cannot sell an overpriced home. It should always be remembered that the estate agents have control over their marketing and sales strategy.
Chas Everitt estate agents have the competence and confidence to tell you the truth about the market. This is the only way you will know the true value of your home
8. What is a "cooling-off" clause?
If the purchase price of the property is R250 000 or less, the buyer has the right to cancel the sale within 5 working days of signing the agreement of sale.
Should the buyer elect to cancel the sale, written notice must be given to the seller within the 5 working day period (excluding the day on which the offer was made, weekends and public holidays).
Your estate agent will be able to assist you with the legalities in this regard.
9. What are latent and patent defects and what does 'Voetstoots' mean?
Obvious faults are known as patent defects. These are faults which are clearly visible and should be pointed out by your estate agent.
Those faults which cannot be seen upon a normal inspection, are known as latent defects. Should the seller be aware of any latent defects and not disclose them to the buyer, the seller can be held liable for the repair of said defects.
Voetstoots means that the property is sold "as is" or as it stands - for more detailed information refer to the page titled What Does Voetstoots Mean
10. What is occupational interest/Rent?
A purchaser who has taken occupation of a property before it is registered in his name, is usually required by the seller to pay a monthly amount for such occupation. This amount is referred to as occupational interest or occupational rent.
It is important to note that a seller may also be liable for occupational rent. This happens when the property is transferred into the buyer's name before the occupation date i.e. while the seller is still occupying the house.
The amount of occupational rent also requires careful consideration. Too low an amount (relative to the value of the property and the monthly bond repayment) can result in the purchaser seeking to delay the transaction because the occupational rent is lower than his bond repayments will be.
It is advisable that payments be made to the transferring attorney, as this ensures better control and avoids misunderstandings.
11. What are "Guarantees" and why is the guaranteed date so important?
A guarantee is a written undertaking by a financial institution to ensure that the funds to finance the home are available. The purchase price is usually secured by means of guarantees acceptable to the seller. These are payable upon date of registration of transfer, normally to the conveyancer who presents them to the issuing bank on behalf of the seller. In practice this happens on the first business day after transfer.
It is important to note that where the purchaser has applied for a bond to be registered over the property, these guarantees are issued by the bank to which he has applied for a loan. They are sent by the bank's conveyancer only after the purchaser has signed the bond documentation and paid the costs. For this reason, the period required for the guarantees should not be in breach of the sale agreement. It must also be emphasized that occupation should not be given before the guarantees have been presented.
Author: Chas Everiit