Selling a home is a significant decision that requires careful consideration and preparation. Before listing your property, it's essential to assess market conditions, understand the costs involved, and have a few tips for selling in a tough market just in case. Additionally, repeat buyers need to be informed about the changes in the home loan application process.
We have compiled a comprehensive guide to help you determine if you're ready to sell your home.
Before you list your property
Unless there is a reason to urgently sell your property, it is advisable to first enlist the expertise of a property professional to help you understand the market conditions and how your plans after selling your home will affect the decisions you will need to make.
The property market works in cycles. At times, the market will favour buyers and at other times, the market will favour sellers. It all depends on the economic environment and conditions that surround the local housing market. It is important to remember that while there is a market trend throughout the country, there will also be certain areas that buck the trend due to specific, circumstances that influence that particular area
A good agent will be able to determine whether it is the prime time to list the property to get the best possible price. In certain cases, such as when there are many similar homes on the market in the area, it might be better to hold back on listing the home in order to achieve the home’s full value
Understanding the costs involved
If you are getting ready to sell your property, you need to make sure you understand all the costs that are involved with selling your home.
- Bond cancellation: If there's a bond on the property, expect to pay a cancellation fee. Notify your bank at least 90 days in advance to avoid penalty interest. The seller is also likely to incur costs related to the transfer of the property. However, this tends only to happen if you wait until the sale of your property has been finalised before notifying the bank, as you may then be liable for the penalty interest.
- Compliance certificates: Obtain certificates for electrical, plumbing, gas, beetle, and electric fencing compliance. It would be prudent to budget for around R1000 for each. We also suggest budgeting for any faults that those inspections might reveal, as they would need to be fixed before the compliance certificates can be issued.
- Rates, taxes, and levies: The conveyancing attorneys handling the transfer of the property will require a clearance certificate from the local authorities stating that all rates and taxes are fully paid. You may be required to make future-dated payments between two and six months in advance. The amount will be an approximation based on past accounts and can be a large sum. As such, the seller should make provision for this cost as soon as the property goes on the market. In the case of sectional title properties, the homeowners' association may require you to pay the levies a few months in advance to ensure all costs are covered while the property transfer is in process.
- Agent commission: Factor in the commission payable to your real estate agent, calculated as a percentage of the purchase price.
- Miscellaneous Costs: While not applicable to all property sales, Capital Gains Tax (CGT) is certainly one that needs to be planned for where it does apply. CGT is the tax payable on the disposal of an asset (your property) where the proceeds exceed the base cost. CGT is the responsibility of the seller and forms part of income tax payable to SARS. Moving costs should also be taken into consideration as it can be a significant one. This would include the fees of a professional movers company or the transport cost of doing it yourself. Depending on the nature and distance of the move it may also be useful to get insurance for the items being moved.
Tips for selling your home in a tough market
Appointing the right real estate agent to partner with is important when selling your home in a tough market, but it’s equally important for sellers to take an active role in the process as there are numerous things a homeowner can do to significantly facilitate the sale.
Find the right agent
Good agents are worth their weight in gold, but the wrong agent can just as easily scupper a deal. Interview at least two agents and don’t be won over by the highest valuation received, especially in a tough buyer’s market when the highest valuation is usually not the best valuation. Rather select an agent based on their skill sets, their local market and area knowledge, the company’s marketing ability, and their track record in your neighbourhood.
Touch up – but don’t over-upgrade
Quick fixes always pay off, but you are unlikely to see a return on investment for major makeovers just before selling. Make sure all fixtures and fittings are working, replace broken door handles, and fix leaky taps. If possible, give the interior and exterior a fresh coat of paint, but stick to a neutral palette so that the new homeowner can add their personal touch and splash of colour.
That said don’t underestimate the importance of the kitchen! It is the heart of the home and it’s the one room where you can splurge a little more when touching up - and recoup most of the money. If you have a little extra cash, buy one quality stainless steel appliance because when people see one high-end appliance, they assume all the others are also good quality. It will also update the kitchen nicely.
Professional photography
With so many properties on the market at the moment, you need to grab potential buyer’s attention and the best way to do this is with quality photographs that show your home to its best advantage. A meager selection or pictures depicting mess and clutter will ensure your home attracts very little interest.
Ask your real estate agent if they can do virtual or video tours as well as this will allow potential buyers to get a more immersive experience of your home and it will make it stand out from the rest.
Have a look at your property ads online and compare them to other similar properties in the area. Particularly examine the photos, what the lead image is, how big the rooms look, and also read the property description. If yours doesn’t stand out from the others, ask your agent to amend the advert.
Be show-ready
You never know when your buyer is going to walk through the door and it’s very possible that he or she will want to view it at short notice. Don’t leave dishes in the sink, make sure the bathrooms are always sparkling and that bedroom floors are sock- and underwear-free. Yes home viewings can be a pain, but the sooner you let prospective buyers view your home, the sooner it will sell, so be flexible.
What repeat buyers need to know about home loans
The application process for home loans has evolved substantially, especially for repeat buyers who may not have experienced these changes in over a decade. The National Credit Act has introduced more rigorous scrutiny of factors like debt, income, and monthly expenditure to prevent consumers from becoming over-indebted. While banks are eager to lend, responsible lending practices necessitate a thorough assessment of a borrower's financial situation.
To help you navigate the process we advise that you enlist a home loan originator. The team at MyProperty Home Loans will be able to not only get you pre-qualified but also help you apply to all the major banks when you are ready to buy your dream home.
Preparing for a smoother application process
Repeat buyers can play an active role in expediting the application process by providing thorough and accurate documentation. Here's a checklist of essential details and documents to prepare:
- Personal Details: Include full names, ID number, tax number, date of birth, phone numbers, marital status, number of dependents, educational background, current address, and length of stay. Support these details with hard copies of relevant documents, such as ID book, marriage certificate, qualifications, tax returns, and a council account verifying the address.
- Employment Details: Provide information about current and past employers in the last two to five years. Include the employer's name, address, phone number, position held, and type of work. Support this with documents like appointment letters, job descriptions, and specialized qualifications earned.
- Income Details: Furnish gross and net household earnings, accompanied by three months' worth of payslips and bank statements. Document additional income sources, such as overtime, bonuses, commissions, dividends, interest, rental income, alimony, or child support payments.
- Monthly Expenditure: Detail existing debts, regular payments (school fees, insurance premiums, etc.), and average monthly expenses (groceries, transport, entertainment). This helps lenders assess discretionary income and affordability. Ensure no debts, even small ones, are omitted.
- Additional Documents: Depending on circumstances, be prepared to provide an offer to purchase, a property title deed, building contract (for plot-and-plan homes), and documentation related to the sale of existing homes. These documents should be very easy to find if you have been keeping a legacy file for your home.
- Other Assets: While not always required, disclose additional assets like savings, shares, holiday homes, rental properties, and life insurance policies.
In conclusion, selling your home requires careful planning and consideration of market conditions, costs, and tips for success. By understanding these factors and seeking professional guidance, you can navigate the selling process with confidence and achieve the best possible outcome.
