With the real estate market marking time before an expected upturn next year, now’s a good time to steer clear of some common mistakes that can easily block a property sale.
“Homebuyers and sellers are often their own worst enemies,” says Dr Piet Botha, chairman of the Nationlink estate agency group, “but in the current market climate they need to be especially careful to keep the sale process going smoothly.”
Some pitfalls for sellers to avoid, he says, are:
* Using the wrong information to calculate the asking price. This should not, for example, be based on the municipal value or the insurance value of the property but on a proper comparative market analysis done by a qualified estate agent.
* Hiring the wrong agent. Sellers should interview several agents, from small and large firms, and get references and success stories as well as written marketing plans. They should certainly not make their decision to award a mandate based only on the highest suggested listing price or the lowest commission charges.
* Under-estimating the length of the selling process. This is often more extensive than people think, from the painstaking preparation of the property through tough negotiations to delayed transfer. Financing can get held up and buyers may have a hard time selling their old house, so you should allow extra time to seal the deal.
For homebuyers, the worst mistakes include:
* Failing to organise their finances. Before they go house hunting they should consult a bank or mortgage originator to establish how much they will be able to borrow and what price of property they will be able to afford.
* Trying to time the market. This is a mistake because while property prices rise more slowly at some times than at others, they generally keep rising. In other words, it is always cheaper to buy a home today than it will be tomorrow.
* Missing the big picture. They need to ensure that their “dream house” does not bring with it quality-of-life challenges such as longer commutes, distant schools, limited access to services, higher taxes or an unreasonable homeowner association, which can sour a purchase for them after just a few weeks.
* Signing without sufficient knowledge. The offer to purchase is a legally binding document once accepted by the seller. Buyers must be very sure they understand every word it says and the legal or financial implications of every clause. In addition, any oral agreements – as to repairs being made or occupation dates, for example – should be put in writing.