It’s time to sell
The time has come to sell your property.
From the plethora of reasons which might include you’re upsizing, downsizing, dying or selling due to the investment going south – one needs to realise that at some time or another, a property will be sold, disowned, repossessed or traded.
To make it easier for the normal person on the street to sell their property, I have written this blog post.
Getting rid of chancers and investors
Stating the obvious, we know that you want the best price for your property. It’s also common knowledge that property is as liquid as bricks and mortar.
This is why buyers often believe they have the power to negotiate a low purchase price.
In many circumstances, this makes for sad sellers.
For this reason, it’s important that you price your property according to the amount of time you’re willing for it to be on the market. If you want to get rid of it quickly, you will need to sell it cheap. If you want to get a good price, you need to be able to weather the storms and wait for a good deal from a buyer.
The onus is on you to do your market research on how much you will be able to sell your property for realistically. Don’t trust the agent who is selling your property. Many agents are willing to sell both your kidneys at a discount to receive a commission.
Making your property appealing
We need to realise that buying a home is an emotional experience.
People want to feel an emotional connection with a home. They use words like ‘it needs to speak to me’ and ‘I am not feeling it’. For this reason, we need to make the experience wonderful and delightful for anyone coming into the house for a viewing.
I am not suggesting offering them 500-year-old whiskey and hiring paint strippers to make them feel ‘at home’, but that there are important changes that you can get in place to make the experience smooth and wonderful.
Fixing the important things in your property
When a new person engages with a new space or person, it’s interesting to note what their reactions are.
These include breathing, smelling and looking.
People are acutely aware of the new space.
As the seller, you can fix some small things that can make a very big difference to the purchaser’s perception of the property.
These include:
- Door knobs – being the first thing people touch when entering a room or house, if these are broken or not working, it makes for a terrible first impression
- The paint job – Neutral colours such as white are timeless, yet many people try to sell their property that looks shoddy and dirty. It’s best to be human and clean the walls. Include paint for the ceilings and cornices!
- The kitchen and bathroom – Many companies push to fix these before you move out. In my personal experience, one can make small changes here with a big impact. These include respraying old enamel baths and/or replacing broken cupboard handles (or even just the doors).
- The garden – If your garden looks like the Namib desert, it is advisable to start growing something in there. Make it look aesthetically pleasing.
- Lighting – fix light fittings and light bulbs that are broken. Make sure that the property is well lit for potential buyers.
When you’re ready to sell
Careful!
Be wary of sole mandates. This is often a back door for you to get into a legal issue if you find a seller yourself.
Once you have fixed up a few small things on your property, it’s important to do your market research about commissions, fees and due process.
Some estate agents charge a large fee of up to 10% of your property value. For larger properties, some companies do charge a flat rate. The first one that comes to mind is LeadHome.
Make sure that they are accredited and ask them contractually what they will do to market your home. Ask about their marketing strategies and their success in the area. You need to know from them how many houses they’ve sold in the area that are similar to your house and how much the sellers received in their pockets.
Make sure the contract you sign with them is read and understood.
Don’t just sign anything.
Viewings and selling
There is currently a trend of properties being sold online through websites.
Though this is awesome, people will often still come and view the property before making the final decision.
Make this experience as wonderful as possible.
The property show experience
Your estate agent will most probably have show days for your property. If this is the case, you would be required to disappear for the afternoon while they show it. Consider the following:
- Don’t have any unusual odours and smells in the house
- Make sure everything is well lit
- Hide all valuables that you would not like to lose such as iPads and laptops.
Negotiations
Once you have an interested buyer, you will be contacted by the agent with the offer.
Some agents require an offer to purchase (OTP) before presenting the offer to the seller. Some call the seller first to confirm and then make it official with an OTP.
Never sign anything if you’re not happy with the terms and conditions and the price.
You as the seller have the right to say no to any deal presented.
Note that you can negotiate on other terms, not just the selling price. I have heard of negotiations on the COC, transferring attorneys, cash price sale, and maintenance that needs to be done on a property.
All of these things will help you get the best price for your property.
As much as you want a good deal, the purchasers will do anything in their power to get the best deal for themselves.
The voetstoots clause
In South African law, there is something called a voetstoots clause. In Latin one could use the phrase ‘caveat vendor’. This refers to the idea that a property is sold as-is – with all its defects.
Many think that the National Credit Act has replaced this clause, but this is not true. It’s only for people who actively trade in property, such as a property developer.
For the voetstoots clause to be declared inapplicable, the onus is on the purchaser to prove that the defect(s) were wilfully withheld from the purchaser.
I recently had a case like this, where the seller willfully chose to get an illegal COC without fixing the property issues. I discovered this before I signed the final paperwork, and negotiated a special clause in the contract to get the issues fixed.
This section is added that the seller is aware that they should not willfully withhold any knowledge of defects on the property. For more info, check this article on private property.
Costs when selling a property
Never think that there will be no cost involved in selling a property.
There will be costs for a COC (Certificate of Compliance), bond closing attorney costs and other fees payable.
For more information, check my article here.
The last warning
Always read your contract.
I have heard horror stories where the estate agent, electrician and/or attorneys cheated sellers and buyers – and I have had a few of those personally as well.
For example, someone close to me was asked to sign a sole mandate contract which stated that upon selling the property, the commission will be paid to him – and this will be done even if the property is sold by someone other than the sole mandate agency.
We know of recent cases where the sole mandate contract could not be cancelled 3 days early, and the estate agent took legal action against the seller for breach of contract.
Be careful out there!
Conclusion
If you want a good price on your property, you need to have time on your hands. It also needs to be well maintained and aesthetically pleasing. If you want to get rid of your property quickly, a lower selling price will make the property leave your ownership.
Make your property attractive to buyers and negotiate with them for a fair price.
The onus is on you to know what your property is worth.
Never lie about property defects.
Happy investing!