No one really likes disclosing their personal financial details to a virtual stranger, however, when it comes to buying property, it pays to be honest and upfront with your agent.
Agents qualify buyers as a matter of course and they do this for a number of reasons. Firstly, they need to ascertain what the buyer can afford. We all tend to think 'big' when looking at property and assume that an extra R100 000 or so won't make much of a difference when it comes to paying a bond, however, banks generally think differently and buyers may find themselves scrambling to find money for a larger deposit and transfer fees if they buy beyond their true means.
Secondly, qualifying a buyer affords the agent and seller a little protection against thieves who target homes that are on the market. Agents generally become suspicious when a person who wants to view property, is unwilling to disclose what he can or cannot afford.
While agents understand that buyers are wary about disclosing financial details, they have to have a sound idea of where the buyer stands financially if they are going to successfully conclude a sale. It's not all about what the buyer thinks he can afford.
Adrian Goslett, CEO of RE/MAX of Southern Africa says that real estate agents should give the buyer some guidance regarding transfer duties, attorney's fees, deposit requirements and how the interest rate can affect their monthly bond repayments.
“Knowing how much a buyer has to work with as far as a deposit or paying their own property transaction costs is important for an agent. Many first-time buyers and even experienced buyers are unaware as to how much the transfer costs will be."
While some may have lofty ideas as to what they can afford, others play down their financial affairs in the hope of finding a bargain. Unfortunately, this plan often backfires and wastes the time of both the agent and buyer when, despite showing numerous properties in the buyers purported price range, nothing suitable can be found.
Buyers who put all of their cards on the table and are open about their earnings and outgoing expenditure will have an easier time of things because the agent that they are working with will be able to offer them sound and proper advice, based on the facts.
Think it about it this way - buyers who aren't willing to be upfront are basically forcing their agent to operate in a knowledge vacuum. If you want the agent to do a proper job, you have to supply him with all the facts and ensure that these are accurate.
Don't assume that you have more knowledge than the agent. The modern, EAAB registered agent of today is well-educated and well-equipped to conclude a successful property transaction.