Selling your home can be daunting, but with the right approach and a few smart strategies, you can increase your chances of a quick and successful sale.
Getting ready to sell your home
1. Should you sell your own home?
Selling your home yourself and keeping the commission in your pocket instead of paying it to an estate agent may sound like a good idea but you should be aware of the dangers before you decide on this approach.
These include:
You carry all the costs of advertising and marketing, whether or not you sell your home.
And not only that, you will have to try to gauge which advertising media might be most effective, and place and monitor your ads. You will also need your own for-sale boards made and put them up and take them down in accordance with your local authority’s signage bylaws. And finally, you will need to organise and run your viewings. A reputable agent on the other hand will be following the strict industry guidelines for viewings, and your risks will be significantly lower as a result.
Lack of exposure.
Most private sellers don’t have the knowledge or resources to expose the property to a big enough pool of potential buyers and create enough awareness. Good estate agents, on the other hand, will have access to existing buyer bases as well as national and international advertising and marketing channels including property portals like MyProperty.
Lack of experience/skill in negotiation.
Most buyers are tough negotiators at the moment, having done their homework and research. The first thing most will tell you, for example, is that if you are selling privately and not paying commission, the saving should go to them and not you. On the other hand, most sellers are not practiced negotiators and will find it difficult if not impossible to achieve the detachment necessary to reach a mutually beneficial agreement.
Legal and liability issues.
Apart from the need to achieve familiarity with sale agreements and all sorts of other legal documents – or to pay an attorney to check them – private sellers also potentially face all sorts of liability issues when they are dealing with a buyer one-on-one. Laws dealing with property sales have become much more numerous and more complicated in recent years, and the new Consumer Protection Act is just one of the minefields that have to be crossed in order to achieve a successful sale.
Unqualified buyers.
There may be many people wanting to buy but banks have strict prequalification and approval requirements, and real estate professionals know this and oftentimes ask for buyers to provide a prequalification certificate before starting the house hunting - this way they don't waste their time or seller's time with buyers that will not be able to qualify for the required home loan. However, it is very difficult for private sellers to establish the financial capabilities of potential buyers so they don’t waste time with people who won’t qualify for a loan, people who don’t have enough cash for the deposit and transfer fees or worse, people who are trying to ‘scam’ them into giving them the occupation of their homes.
Security.
As a private seller, you have no screen between you and potential buyers – or potential crooks who may use the opportunity to get inside your home and either steal things while looking around or “case” the property and security systems for a much bigger crime at a later date.
Holding costs.
If your home fails to sell because it is overpriced and/or underexposed, you will just have to keep on paying your bond, rates, and taxes, electricity and water charges, insurance premiums, and security and maintenance costs – and these ‘holding costs’ can quickly mount up to more than the potential saving of not paying an estate agent commission. Take an example of a home that is on the market for the current average SA home price of around R1,1m, for which a good agent would charge a maximum commission of around R77 000 (7% of the price). The holding costs on such a property are likely to total at least R13 500 a month if we conservatively estimate a monthly bond repayment of R8500, rates of R500, utility charges of R2500, HOC and bond insurance of R1000, and security and maintenance costs of R1000. This means that the holding costs would outstrip the commission amount within six months – and that is six months in which you might have lost out on a great deal on a new home, or simply been prevented from being able to move on with your life.
Make sure the agent you choose has a verifiable track record, a good reputation, and a valid Fidelity Fund Certificate. A big mistake that many sellers make is also neglecting to sign a sole mandate. By signing a sole mandate, you make it one agent’s sole priority to sell the home within a stipulated period.
2. How to prepare your home for selling
Before you take listing photos and advertise online, you might want to get out your toolbelt or call in the professionals to do some maintenance around the house.
Fix all the niggling maintenance issues and if it is financially possible, give the property a fresh coat of paint. If you are going to paint - use neutral colours and steer clear of wallpaper, as not everyone will like bold colours or bright patterns. The more neutral it is, the easier it will be for potential buyers to imagine their own touches and finishes inside the home. It will also mean that the house is more move-in ready and won't scare off buyers that aren't in the market for a fixer-upper. Remember that you might not get your money back if you undertake a huge project before you put your house on the market - unless you have done your research on what buyers are looking for in properties and if they are truly value-adding projects. But if you are looking to sell fast rather than just opt to do updates that will pay off replace door handles, and cabinet hardware, make sure closet doors are on track, fix leaky faucets and clean the grout.
The majority of buyers begin their house hunting process online. Having professional listing photos can significantly impact the appeal of your property listing. Buyers are more likely to remember and consider homes with stunning photos, which can give your home the competitive edge. Professional photos can capture the property in its best light, making it more attractive to potential buyers right from the start. If you get the listing photos wrong, you can dramatically reduce the amount of buyers who will be willing to come and view the home in person.
Whether your agent does a video tour or a more advanced 3D tour, in the digital world having a virtual open house that is accessible to property buyers 24/7 is going to count in your favour. It is a marketable addition to your listing and will get more eyes on your property much quicker than a traditional open house would have.
Make sure you have every document that pertains to your property at the ready - these include all the compliance certificates, building plans, and financial documents. The more you prepare before you list, the less you have to scramble when it goes to market.
3. Price your property correctly
The importance of pricing your property correctly cannot be overstated, overpricing does not allow room for negotiation - it will only drive away potential buyers.
For prospective buyers who can meet your high asking price, they might soon realize that compared to other similarly priced properties, your home delivers less value. Meanwhile, those who could afford your home at its market value may not even consider it. After all, why would they pour their resources into a property they believe is out of their reach?
What to do if your home is overpriced
Before working out what to do when your property overpriced you need to determine if your home is truly overpriced. Here is how to tell if your property is overpriced:
- The home is priced well above neighbouring properties for sale
- Buyer interest is very low - even on show days
- Despite months of marketing, all the offers are below the asking price
- Properties in the neighbourhood are selling quickly, while yours aren't
If you are sure that your home is overpriced there are a few steps you can take to rectify it. We recommend taking down your old listing, sprucing up your property if possible, and taking fresh photos of the property. Get a property professional involved that can help you get a comparative market analysis so you can relist with a fair market price and make sure you are honest with potential buyers when they are apprehensive about your property.
What to do when your home is on the market
If you have lived in a property for a long time and even more so if you have raised a family in the home, we tend to think that our homes are the best - however, while it might be true that you do have a stellar property making sure that shines through when you do have an open house is crucial.
The easiest way to do this is to clean up. This means you declutter everything and remove as many of the personal items as you possibly can. The bonus is that you are already making a dent in the packing you'll have to do once the property is sold! If you are a pet owner it would be advisable to go through the house and make sure it is odour and hair-free the morning of the open house.
Keep the garden clean from pet waste and during the show hours, it would be great if you could either have someone take the dogs for a walk or if you are not sticking around, take them with you.
It can be quite exhausting having your home ready to show at all times but if you set a schedule for cleaning and decluttering you won't be caught off guard if your agent calls to set an appointment to bring a very interested buyer. There is not much that can make a home unsellable, but there are plenty of things that can make a home incredibly difficult to sell. Once listed, it can be tricky to address the issues that are working against the home’s sale.
The transfer process for sellers
The process of transferring ownership from a seller to a buyer involves several key steps, each essential for ensuring a smooth and legally sound transaction. Here's a breakdown of what sellers can expect during the transfer process:
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Closing the deal: Once the sale has been finalized, typically with the assistance of your estate agent, both the buyer and seller will begin the transfer process.
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Choosing a transferring attorney: As the seller, you have the option to choose a transferring attorney, or your estate agent can recommend one. It's important to note that the buyer will be responsible for covering the transferring attorney's fees.
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Cancellation of home loan: If there is an outstanding home loan on the property, a cancellation attorney will be appointed to handle the cancellation process.
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Document preparation: The conveyancing attorney will request various documents from both the buyer and seller. These may include banking details, identity documents, and other FICA (Financial Intelligence Centre Act) information.
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Preparation of transfer documents: The conveyancing attorney will prepare the necessary transfer documents for the property. Once ready, both parties will be required to sign the deed of sale at the deeds office.
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Lodging documents at the deeds office: After the signing of the deed of sale, the conveyancing attorney will lodge the transfer documents at the deeds office for processing.
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Notification and payment: Once the documents have been lodged, both the buyer and seller will be notified. The seller will receive payment for the property on the following day, completing the transfer process.
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Ownership transfer: With the completion of these steps, the property's ownership legally moves from the seller to the buyer, marking the successful conclusion of the transfer process.
Overall, the transfer process involves careful attention to detail and coordination between all parties involved. By following these steps and working closely with your estate agent and attorneys, you can ensure a seamless transfer of ownership for your property.
Common mistakes sellers make and how to avoid them
Just when you think everything's sailing smoothly with a signed Offer to Purchase (OTP) in your hand, the unpredictable seas of home selling can throw you off course. Brace yourself, it's not always a joyride. There are a few twists and turns you need to be ready for.
Let's shine a light on some of the most typical culprits that can leave a home sale stranded just shy of the finish line:
Buyer's Bond Application Rejection: In today's high-interest rate environment, buyers may find it challenging to secure the full bond amount they initially anticipated. If a buyer's bond application gets rejected, and they can't secure alternative funding, the sale could collapse. Many sellers prefer cash offers or those from buyers with pre-approved home loans from their bank or a bond originator. Get yourself prequalified here
Unmet Suspensive Conditions: Suspensive conditions are prerequisites that must be satisfied before the transaction can proceed. While bond approval is the most common, other conditions may be included in the OTP. These conditions are usually listed as follows: "[...] is subject to and conditional upon the fulfillment of the following suspensive conditions:". Buyers then list specific conditions, such as requiring the seller to address unapproved structures or demanding an additional home inspection. Both parties must agree to fulfill these conditions before the sale can proceed.
Issues Discovered During Required Inspections: Before closing a sale, sellers must obtain certificates of compliance (CoCs) to confirm that the property meets safety standards. This includes electrical, plumbing, gas, and beetle compliance certificates. If issues are uncovered, the seller is responsible for rectifying them at their expense. If there are delays in addressing these issues, the offer may expire. Depending on the OTP terms, the buyer can choose to extend the offer or cancel it.
