Need-to-knows for sell­ers

Lesotho Times - - Property -

IT is not un­com­mon for sell­ers to re­ceive more than one Of­fer to Pur­chase (OTP) on their prop­erty at a time, es­pe­cially if the home is sit­u­ated in a sought-af­ter area.

“While it might be tempt­ing to sim­ply ac­cept the high­est of­fer, this isn’t al­ways the best of­fer and it is im­por­tant to look at all of- fers on their own mer­its, pay­ing par­tic­u­lar at­ten­tion to the clauses of each con­tract,” says Adrian Goslett, Re­gional Direc­tor and CEO of RE/MAX of South­ern Africa.

“The seller’s real es­tate agent will be able to pro­vide some valu­able in­sight when go­ing through each of­fer to de­ter­mine which one is the most ben­e­fi­cial.

In terms of the man­date given to the agent, the agent must act in the best in­ter­est of the home­owner to en­sure that the op­ti­mum out­come is achieved dur­ing the prop­erty trans­ac­tion.”

Goslett says the high­est value of­fer might seem as though it is the ob­vi­ous choice from the out­set and achiev­ing the high­est pos­si­ble sales price is ul­ti­mately the end goal, how­ever, there are other as­pects that need to be con­sid­ered be­fore mak­ing a fi­nal de­ci­sion.

Be­fore sell­ers think about ac­cept­ing an of­fer, Goslett sug­gests they should have the fol­low­ing in place:

- Have copies of any coun­cil-ap­proved plans on the prop­erty, as well as check­ing all other doc­u­men­ta­tion is up-to-date and cor­rect. This will ex­pe­dite the time it takes for the prop­erty to be trans­ferred, en­sur­ing the process goes more smoothly.

- En­sure that the con­tract is easy to un­der­stand and cov­ers all as­pects that are to be agreed upon by both par­ties.

This should in­clude fac­tors such as which items will be re­garded as fix­tures and fit­tings. Hav­ing these as­pects in a writ­ten doc­u­ment will re­duce any chance of a mis­un­der­stand­ing or dis­agree­ment in the fu­ture.

Goslett says when a seller is re­view­ing each OTP there are a few crit­i­cal el­e­ments that they should pay par­tic­u­lar at­ten­tion to, as this will help them dif­fer­en­ti­ate be­tween the var­i­ous of­fers.

He gives sell­ers four ba­sic points to con­sider:

Is the of­fer con­di­tional? The ma­jor­ity of of­fers in to­day’s mar­ket are sub­ject to cer­tain sus­pen­sive con­di­tions that need to be sat­is­fied be­fore the trans­ac­tion can come to fruition.

These could in­clude the buyer first hav­ing to sell their cur­rent home be­fore they can pur­chase the seller’s prop­erty.

While not en­tirely out of the or­di­nary for an OTP to be void of any sus­pen­sive con­di­tions, it is im­por­tant for the seller to con­sider that the prop­erty will be off the mar­ket while the terms and con­di­tions are wait­ing to be met, should they choose to ac­cept the of­fer.

Does the buyer have a de­posit? Most buy­ers will be re­quired by the bank to have at least 10% of the pur­chase price of the prop­erty as a de­posit, how­ever, in cer­tain in­stances, a buyer may be asked to pro­vide as much as 30% of the pur­chase price.

The more money the buyer has avail­able to put down as a de­posit, the greater the chance the buyer will have of ob­tain­ing the re­quired fi­nance to pur­chase the home.

Of­ten a de­posit is also a good in­di­ca­tion of the buyer’s fi­nan­cial po­si­tion and how se­ri­ous they are about buy­ing the home.

IS IT A CASH DEAL OR FI­NANCED? Ideally, the fewer com­pli­ca­tions in­volved in the fi­nanc­ing of the pur­chase, the bet­ter, as it means that less can go wrong fur­ther down the line. Cash is king, but only a small per­cent­age of trans­ac­tions are com­pletely cash deals. The ma­jor­ity of buy­ers will re­quire a bond, but banks are far more will­ing to ap­prove a bond if the buyer re­quires less than 80% of the pur­chase price of the home.

Although gen­er­ally not an is­sue, it is ad­vis­able to be cau­tious of buy­ers that re­quire third par­ties to sign a surety on their be­half.

Date of oc­cu­pa­tion In the per­fect sce­nario the oc­cu­pa­tional date and the trans­fer date would co­in­cide. To a large de­gree, this will mit­i­gate the amount of stress and com­pli­ca­tions in the event that the deal does not ma­te­ri­alise. If the of­fer con­tains any sus­pen­sive con­di­tions, the seller should not al­low oc­cu­pa­tion of the home un­til these con­di­tions are met and all doc­u­men­ta­tion has been signed by both the buyer and seller at the con­veyanc­ing at­tor­ney.

“Once a seller has pe­rused all as­pects of each of­fer and is sat­is­fied, then they can con­sider the price that the buyer is of­fer­ing.

There are in­stances where the seller could find that the lower of­fer is ac­tu­ally the right one for them, depend­ing on their needs and the con­di­tions of the of­fer,” says Goslett.

— Prop­erty24

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