Price isn’t the only thing to consider when evaluating offers on your property. Here’s what else you need to look out for before signing that offer to purchase.
If you’re selling your home (particularly if it’s in a sought-after area), you might receive multiple offers to purchase at the same time. However, it’s worth your while not to simply accept the highest offer, but to spend some time reviewing each one first.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa says, “The seller’s real estate agent will be able to provide some valuable insight when going through each offer to determine which one is the most beneficial. In terms of the mandate given to the agent, the agent must act in the best interest of the homeowner to ensure that the optimum outcome is achieved during the property transaction,” says Goslett. “The highest value offer might seem as though it is the obvious choice from the outset and achieving the highest possible sales price is ultimately the end goal, however, there are other aspects that need to be considered before making a final decision.”
Goslett advises that before you accept an offer, make sure to do the following, to expedite the time it takes for the property to be transferred and ensure a smooth process:
- Get copies of council-approved plans on the property
- Make sure all documentation is correct and current
Goslett also advises doing the following, to reduce any chance of misunderstanding or disagreement:
- Drawing up an easily understandable contract, in which all aspects are agreed upon by both parties
- Include all necessary items, such as fixtures and fittings
According to Goslett, when you are reviewing each offer to purchase on your home, it is important to pay attention to the elements that set each offer apart:
Suspensive conditions
These days, many offers come with certain conditions that need to be met, before the transaction can take place. Offers can be reliant on things like the buyer having to sell their home first, before they can complete the purchase. Make sure you consider these conditions and the fact that, should you accept the offer, your property will be off the market while these conditions are waiting to be met.
Deposit
Consider how much the buyer can put down as a deposit on your home. Most buyers will be required by the bank to have at least 10% of the purchase price of the property as a deposit, however, in certain instances, a buyer may be asked to provide as much as 30% of the purchase price. The larger the deposit that they can put down the better, as this shows how serious a buyer is about your property and says a lot about their financial position.
Cash vs finance
Cash is preferable, but not always the most realistic option. A rule of thumb when it comes to finance is to take the offer with the least complications. The less that can go wrong during the transaction, the better. The majority of buyers will require a bond, but banks are far more willing to approve a bond if the buyer requires less than 80% of the purchase price of the home. Be careful of buyers that require a third party to sign as surety on their behalf.
Date of occupation
Ideally, the date of occupation and the transfer date would be the same, which would take away a lot of stress and complications. If the offer contains suspensive conditions, it’s advisable not to allow the buyer to occupy your home until these conditions are met and all documentation has been signed by both you and the buyer at the conveyancing attorney.
“Once a seller has perused all aspects of each offer is satisfied, then they can consider the price that the buyer is offering. There are instances where the seller could find that the lower offer is actually the right one for them, depending on their needs and the conditions of the offer,” Goslett concludes.