Owner-seller’s chal­lenges

Sell­ing a prop­erty pri­vately may seem like a walk in the park but in re­al­ity the process is far more complicated and dif­fi­cult than most peo­ple think. Lea Ja­cobs dis­cov­ers why

Business Day - Home Front - - HOMEFRONT -

YOU could sell your own prop­erty, but why would you want to? Yes, it sounds an easy enough ex­er­cise and yes, in the­ory any­way, you could save money, but given the com­plex­ity of the process there are a num­ber of things that can go hor­ri­bly wrong.

Ask most busi­ness peo­ple and they will tell you that although it is easy to fill in a tax re­turn very few would con­sider do­ing so with­out the aid of an ac­coun­tant. Why? Be­cause they run the risk of mak­ing an er­ror and if they do it could prove to be costly. It’s the same when you sell a house. The only dif­fer­ence is that while most will ad­mit to hav­ing had to pay too much to the tax­man, very few, if any, will ad­mit to hav­ing lost money through a pri­vate sale.

We’ve all heard the sto­ries of how a seller beat the sys­tem and made a mint, but se­ri­ously, how easy is it to play es­tate agent and come out of the deal smil­ing?

Adrian Goslett, CEO of RE/MAX of South­ern Africa, says one of the main ad­van­tages of us­ing an agent is the num­ber of po­ten­tial buy­ers they have on their data­base. You may say that the CEO of a large real es­tate com­pany is go­ing to say that, but think about it — the rea­son that real es­tate agen­cies sell more prop­erty than pri­vate in­di­vid­u­als is be­cause buy­ers ap­proach the pro­fes­sion­als in far greater num­bers than they do those sell­ing a prop­erty pri­vately.

That’s not the only rea­son es­tate agents seem to hold most of the cards. Goslett says that over­pric­ing is one of the in­dus­try’s big­gest headaches and will not only lead to the prop­erty stay­ing on the mar­ket for longer, but cre­ates the wrong per­cep­tion in buy­ers’ minds.

Se­cur­ing a bond may also prove to be more dif­fi­cult for those tak­ing the pri­vate route. mainly due to buy­ers’ lack of un­der­stand­ing of a bank’s re­quire­ments. There are moun­tains of doc­u­men­ta­tion, which, if com­pleted in­cor­rectly, could jeop­ar­dise a sale.

Even if the buyer and seller feel con­fi­dent enough to tackle all of the above, there are other is­sues that crop up in just about ev­ery deal. Ad­ver­tis­ing the prop­erty, for ex­am­ple, can be ex­pen­sive, par­tic­u­larly if you want it to be ad­ver­tised in the tra­di­tional me­dia such as news­pa­pers and ex­clu­sive mag­a­zines. It also pays to re­mem­ber that 80% of homes in SA are sold due to re­peat and re­ferred busi­ness.

Per­haps the big­gest chal­lenge fac­ing those who are will­ing to go it alone is the time it takes to mar­ket the home suc­cess­fully.

An agent does far more than sim­ply tak­ing a few pic­tures and knock­ing a “for sale” sign in the ground.

“The amount of time that has to be in­vested in get­ting a prop­erty sold is a bur­den on a home own- er,” says Goslett. “The pri­vate seller needs to ask him­self some very im­por­tant ques­tions be­fore he starts to mar­ket his prop­erty ac­tively. Are you im­me­di­ately avail­able to show your home when a po­ten­tial buyer wants to see it? How ob­jec­tive will you be when the buyer starts crit­i­cis­ing el­e­ments of the home? Is the buyer com­ing through the door pre­qual­i­fied for a home loan or have they just popped in on a whim? At this stage only 40% of bonds that are ap­plied for are granted by South African banks, which means that the av­er­age seller will prob­a­bly have to ‘sell’ their home two and a half times be­fore achiev­ing a suc­cess­ful reg­is­tra­tion.”

The bot­tom line has to be ex­actly how much money a buyer is go­ing to save by tak­ing the pri­vate route — and let’s face it, it is the buyer who ul­ti­mately ends up pay­ing an agent’s com­mis­sion.

It has been shown time and time again that those at­tempt­ing, and fail­ing, to sell pri­vately will of­ten ap­proach an agent to do the job at a later stage. What is in­ter­est­ing about this is that although sellers then have to fac­tor in the com­mis­sion when sell­ing through an agency, more of­ten than not the ac­tual sell­ing price will re­main ex­actly the same as it was when the owner was try­ing to sell it pri­vately. Makes you think, doesn’t it?

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