Property Advice: Not all offers are equal
In today’s property market it may be tempting for sellers to accept the highest offer to purchase they receive, however, they do need to read through all clauses in the contract and make sure that it is not just the highest but also the best.
This is according to Adrian Goslett, CEO of RE/MAX of Southern African.
He notes that this is why it is important for sellers to be working with a reputable qualified estate agent that can guide them through the process of what to look for when accepting an offer. An agent’s duty is to act in the best interest of the seller in relation to the mandate given and ensure the best possible outcome of the transaction. In some cases the seller may find themselves in a situation where they have received multiple offers at the same time. Although the offer of the highest value may seem like the obvious choice and is the ultimate goal at the end of the day, there are other aspects of the offer to consider before deciding on which one to accept.
Before accepting any offer, sellers should ensure that they have checked or have the following in place:
1. To speed up transfer and to ensure everything runs according to plan, get copies of the council-approved plans of the property. Also check that all documentation is up-to-date with the current and correct contact details.
2. Ensure the contract is clear and states all aspects that are to be agreed upon by both parties, such as which items will be regarded as fixtures and fittings. Having these elements reduced to writing will elevate any chance of a misunderstanding or disagreement in the future.
According to Goslett, there are a few things that sellers can look out for to help them decide on which offer to accept. He gives sellers a few pointers to consider:
Is the offer a conditional?
A large majority of offers received in today’s market are subject to other things transpiring first, such as the sale of the buyer’s home. While it is rare that an offer these days is straight-forward and clean, sellers should bear in mind that their property will be off the market for the time the offer is on the table, should they choose to accept an offer with conditions attached.
Does the buyer have a deposit?
Financial institutions require a minimum 10% deposit, but can ask for anything up to 30%. The larger the deposit the buyer is willing to put down, the more likely they are to obtain the finance required to purchase the home. It is also a good indication of the buyer’s financial position and how serious they are about buying the property.
What percentage of the price is the buyer asking to be financed?
Cash is king and if the buyer requires less than 80% of the purchase price to be financed, banks will be far more willing to grant the finance. Although in the majority of cases it is not a problem, be wary of buyer’s that want other parties to sign surety on their behalf, as the less complications with the financing the better because less can go wrong.
What date of occupation is required?
Ensure that the occupational dates are as close to the transfer dates as possible. This will elevate unnecessary stress or complications in the future if for whatever reason the deal does not go through. If there are any suspensive conditions that are written into the offer, 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 conveyance attorney.
“Once all the factors have been considered, a seller can then consider the price of the offer. An offer-to-purchase that offers a lower price may turn out to be the better offer, if the buyer has the access to finance and is serious about the purchase of the property,” Goslett concludes.