How do you choose the right offer?

Adrian Goslett, CEO of RE/MAX of Southern Africa gives advice on what to look out for when accepting an offer to purchase

Property inventory is currently low and demand is continually increasing in today’s market. This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says that some areas in the country are now experiencing multiple buyers making offers on one home. While it may be tempting for the seller to just accept the highest offer they receive, it is very important that they look at each offer in its own merit and read through the clauses of the contract. Remember that the highest offer may not always be the best offer.
“This emphasises the importance of sellers working with a reputable qualified real estate professional that can guide them through the process of what to look for when accepting an offer to purchase,” adds Goslett. “In terms of the mandate given to the agent, the agent must act in the best interest of the seller and ensure that the best possible outcome is reached during a property transaction. In the instance where a homeowner has received multiple offers on their property at the same time, the highest value offer may seem like the obvious choice and is the ultimate goal at the end of the day, but there are other factors that need to be considered before deciding on which one to accept.”
He notes that before the seller thinks about accepting an offer, they should have the following in place:
- Copies of any council-approved plans on the property, as well as checking all other documentation is up-to-date and correct. This will reduce the time it takes for the property to be transferred and will ensure everything goes smoothly.
- Ensure the contract is easy to understand and details all aspects that are to be agreed upon by both parties. This will 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 that when a seller is looking at each offer to purchase, there are a few points that they should pay attention to, which will assist them in the decision-making process. He gives sellers a few basic points to consider:

Is the offer subject to certain conditions?

A large percentage of the offers to purchase received by sellers in the current market are subject to certain conditions transpiring first, such as the buyer selling their property before they purchase the home. Although it is uncommon that offers will be void of conditions, it is important for the seller to bear in mind 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.
Is the buyer presenting a deposit?

For most buyers, banks will require them to put down a minimum deposit of 10% of the purchase price of the property. In some cases they could be asked for up to 30%. The larger the deposit they have saved up, the more chances the buyer will have for obtaining the finance to purchase the property. A deposit is also a good indication of the buyer’s financial position and how serious they are about buying the home.
Finance or cash?

The old adage of cash is king remains ever true. Banks are also far more willing to grant finance to a buyer that requires less than 80% of the purchase price of the property. While it is generally not an issue, it is advisable to be cautious of buyers that require third parties to sign a surety on their behalf. The fewer complications involved in the financing the better, as less is likely to go wrong.
What is the date of occupation?

If feasible, the occupational dates should be as close to the transfer date as possible. For the most part this will ensure that unnecessary stress and complications are kept to a minimum in the event that the deal falls through. If the offer contains any suspensive conditions, the sellers 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.
“If a seller has considered all other aspects of the offer and is satisfied, they can then consider the price of the offer. It is possible to find that a lower offer may actually be the right offer, provided the buyer has access to finance and is serious about the purchase of the property,” Goslett concludes.

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