Tips for selling in a buyer's market.
Category Advice
We are undoubtedly in a buyer's market. Factors such as the flat price growth, higher stock levels, greater urgency among sellers, and a favourable bank lending environment, all combine to favour buyers, despite the higher interest rate.
While buyers are able to find good deals in the market and secure a favourable rate on a mortgage loan, the challenge in the market for seller's right now is how to sell in a buyer's market.
One of the first things that happens in a buyer's market is that there are fewer buyers around to compete for the greater number of properties on offer. This usually means offers are slower to come in and when they do, buyers tend to offer lower prices.
In contrast, when the market favours sellers and there is a shortage of properties, sellers are usually able to find quite a few interested buyers and can generally bank on a favourable offer and price. It is not so easy when you really need to sell, but you find yourself in a buyer's market.
The first thing to consider if you really need to sell, is to avoid the temptation to overprice your property. The days of fast offers and high prices are now largely gone. Instead, the market is now dictating prices.
If you are selling right now, you may well be competing against 3-4 similar properties in your area or property category in the same price range. Thus, unless your property is offering something more than those competing properties, your chances of success may depend on your price.
You therefore need to trust and listen to your agent. Work with an agent who can show their record of recent sales. Be open and upfront about your needs so that the agent can ensure no time is wasted to find a buyer for your property.
Consider all offers. Remember, an offer often presents the opportunity to negotiate and if each party gives a little, you might still be able to make a favourable deal. You should also consider that you may not get a higher offer.
Think about the time value of money. If you sell now, you may also be able to take advantage of the favourable buyer's market conditions and find a better price for the new property that you wish to purchase. If you wait for a higher price, you may have to also pay a higher price.
It is also important that your property is in top selling condition so that the buyer has no opportunity to look for an opportunity to discount your asking price. The buyer should find nothing wrong when they come and view so that there is no time wasted.
Regardless of where we are in terms of the market cycle, there are always people looking to buy and therefore opportunities to sell. You therefore do not need to wait for the market to improve to sell, especially if you are looking to move or have your eye on another property.
There are up to 5 compliance certificates to be obtained when selling a home:
Agreements of sale may provide for up to five different types of compliance certificates to be obtained by the seller (unless otherwise agreed upon). These certificates must be provided to the conveyancer before the property transfer is registered.
Conveyancing and Property Law attorneys has put together a list of some important aspects in respect of each compliance certificate.
Electrical compliance certifies that the electrical installation on the property complies with the required safety standards (governed by the occupational health and safety Act)
Often remedial work is required which may take some time (best to attend as soon as possible)
The certificate is valid for two years unless alterations are made prior to the expiration date
Parties cannot contract out of/agree to waive.
Beetle certificates certifies that the accessible wood of permanent structures, on the property, does not contain any wood destroying beetles.
Usually valid for 3 to 6 months
Not governed by any specific law but has become practise upon change of ownership of property
If parties agree that no certificate is necessary and the bank requires it for the purchaser's bond, then this is for the purchaser's expenses.
Gas certificates certifies that the gas installation on the property complies with the Occupational Health and Safety Act and requires safety standards.
A certificate must be obtained on installation
If any change or amendment is made, a new certificate must be obtained
Cannot contract out of or agree to waive.
Plumbing certificates certifies that the water installation at the property is in line with the City of Cape Town Water By-laws.
*Only applicable to transfers within the municipal jurisdiction of the City of Cape Town
A new certificate must be obtained upon every change of ownership
Parties cannot contract out of this or agree to waive
NB! Does not confirm all plumbing works in perfect condition!
What does the plumbing certificate confirm?
The water installation conforms to the national building regulations; the property's water meter is in working order; there are no defects that can cause water to run to waste; and no rainwater leaks into the sewerage system.
Electric fence certifies that the electric fence installation complies with the required safety standards in terms of the Occupational Health and Safety Act.
An existing certificate may be transferred by the seller to the purchaser
A seller need only provide a new certificate to the purchaser if a change was made to the installation after the current certificate was issued
If sectional title, obtain from the body corporate
Parties cannot contract out of/agree to waive.
Get expert property advice.
It is always recommended that sellers do their inspections at the listing stage and then they will know what they are in for in terms of repairs. In addition, although it is usually required that the seller should provide the purchaser with the certificate by no later than the date of transfer, it is best that the inspection and remedial work is at least done before occupation by the purchaser and better still even earlier, as most banks now request a copy for purposes of clearance of the bond for lodgement.
Extract from Property 24
Author: Extract from Property 24
