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A seller’s guide to selling a property

Posted by: | Posted on: Dec 17, 2016

A seller’s guide to selling a property

Seller's guide to selling a property

Seller’s guide to selling a property

A WINDOW OF OPPORTUNITY

When a home first goes on the market, there is an initial surge of interest that should be maximized; therefore, your home needs to be priced realistically from the start. Because activity happens so soon after a home is listed, it is a mistake to assume you can ‘test the waters’ with an extremely high price and then later reduce it. Homes should be priced right, right from the start.

When pricing/evaluating a property’s potential selling price, the following needs to be taken into consideration:-

Market Value: This is the most important value as the market will ultimately determine what the property sells for. Both Seller and Purchaser play a role in determining this value, i.e.

• The seller – is he/she willing to consider all offers
• The Buyer – is he/she willing to pay the price asked

The fact is that houses sell at market value!! Ideally the property should be priced objectively based on similar properties that have recently been SOLD (i.e. not necessarily what is currently on the market), taking into account emotional factors like aesthetic appeal.

PRICING ADVANTAGES & DISADVANTAGES:

MARKETABILITY of a property is improved by pricing correctly
Price is the most important NEGOTIATING FACTOR to the buyer
Price COMPENSATES for a property’s shortfalls or inadequacies
INTEREST sells houses not time
Realistic pricing creates INTEREST
INITIAL MARKETING TIME is crucial
Buyers buy by COMPARISON and ELIMINATION
Buyers compare PRICE and VALUE

Do’s:

Combine REALISTIC ASKING PRICE with INITIAL SURGE OF INTEREST
Maintain NEGOTIATING ADVANTAGE with REALISTIC PRICING
Avoid OVER EXPOSURE from unrealistic pricing Don’ts
Eliminate buyers by OUT PRICING them
Choose an Agent on a promised price but on COMPETENCE
Spoil your chance to make a “FIRST IMPRESSION” on a buyer

CORRECT PRICING:

Advantages:
Creates impression of comparatively GOOD VALUE
Increases advertising RESPONSE
Stimulates buyer INTEREST
Achieves maximum EXPOSURE at optimum time
Maintains NEGOTIATION ADVANTAGE BENEFITS
MAXIMUM PRICE ACHIEVED
Marketing period MINIMISED
Disappointment and HAGGLING reduced
LEASE DISRUPTION and fewer show houses

OVER PRICING:

Disadvantages:
LOSES buyer interest
EXTENDS marketing time
ATTRACTS lower offers
REDUCES advertising response Consequences
Buyers are RELUCTANT to make offers
COMPETING properties become more attractive
Property becomes OVEREXPOSED
LACK of buyer INTEREST

Other influencing factors:

Aside from market value and CMA’s the following will have an influence on the value of the property in varying degrees.
Municipal Valuation: This is the value that the Municipality gives a property and is reflected on the Rates & Taxes statement. Rates & taxes are usually calculated on this value.
Bank Value: The Banks will value in terms of replacement for insurance value as well as area risk.
Note: All properties are currently assigned an area risk rating of either a, b, c, d, e. However, the trend is to do away with this in the future.

Risk area ratings are based on the following ongoing assessments:
– Property value trends
– Demand for property in the area
– Age of home
– Maintenance standards
– The availability and quality of the infrastructure in the area

A point to remember is that buyers these days are well informed on the property market, and will look for (amongst others):
– Potential returns (profit) in the long run. This means that they are generally aware of the pitfalls of over paying for a property
– Benefits of the home over similar homes in their price range

GROOMING YOUR PROPERTY TO SELL

Clean up, fix up, or toss out!!

Today a home that stands out among similarly priced comparable properties is the home that sells. Why? BECAUSE FIRST IMPRESSIONS ARE LASTING IMPRESSIONS!

You may not be able to dramatically improve the market value of your home, but you can improve its marketability, and usually this can be done with more elbow grease than hard cash.

Perhaps the most important part of selling your home is properly showcasing your home’s distinct appeal. Consider the following tips to help sell your home quickly, at the best possible price:

GARDEN/EXTERIOR:

• Lawn mowed and edges trimmed
• Freshly turned beds
• Remove all ‘junk’
• Remove doggy-doo’s

DRIVEWAYS/PAVING:

• Bricks in good repair (replace missing ones)
• Swept & uncluttered

ROOF & HOME EXTERIOR:

• Exterior walls washed/painted
• Gutters cleaned
• Paint roof if necessary
• Repair/replace broken roof tiles
• Repair/replace broken windows
• Repair/replace sagging or broken fencing

SWIMMING POOL:

• Sparkling clean
• Neat garden furniture with bright cushions (remove rusted furniture)
• Pool motor in working condition
• Alternatively, drain pool & scrub clean

GARAGE:

* Keep garage as uncluttered as possible

ENTRANCE:

• Front door area: clean, neat & tidy
• Spruce up with pot plants
• Working door bell

KITCHEN/BATHROOMS:

• Spotlessly clean
• Working taps

GENERAL INTERIOR:

• Wash/clean carpets floors, windows, walls etc.
• “Unclutter” & open up areas (pack into boxes and store neatly in garage)
• Create space where possible
•Plants – the bigger the better
• Repaint where necessary

LIGHTING:

• Open curtains & let in sunshine
• Illuminate dark corners & rooms
• Place mirrors strategically
• Light up stairways

SHOW DAY:

• Remove pets on show days
• Go ‘out’ for the afternoon and allow the agent to do his/her job
• Have your home bright, light & spotlessly clean
• Lock up valuables

Lastly, never apologise for your home. The buyer knows your home has been lived in. If there are any objections, let we handle them.

TEN WAYS TO GIVE YOUR HOUSE AN INSTANT FACE-LIFT:

Whether preparing a home for sale or just general update, a few simple changes in décor can make a big difference.
• Brighten rooms: Shades of white account for 50 percent of paint sales, and for good reason: It’s refreshing, restful and all furnishings look good with that colour.
• Rearrange living room furniture: Begin by pulling the sofa into the centre of the room, facing a fireplace or picture window.
• Re-evaluate uses of rooms: A rarely used guest bedroom or dining room can be converted into a home office.
• Use standing screens to mask problem areas: Tri-fold screens are one way to hide eyesores (like home office equipment).
• Fill an empty corner: Place a large potted tree in the corner with a canister light that sits on the floor.
• Create intriguing centrepieces: If collectibles or framed family photos are spread throughout a room, group them together.
• Refurbish cabinets: Strip and refinish old, dark wood. Add new handles or knobs. Replace doors with glass fronts or consider removing them.
• Get rid of heavy drapes: Replace with fabrics that blend with surrounding walls. Add tiebacks on each side.
• Apply self-adhesive wallpaper borders: Use them to brighten up a child’s room or a bathroom.
• Cover a wall with mirror tiles: This is ideal for bathrooms, entries, and other small, dark rooms that lack impact.

COMPARATIVE MARKET ANALYSIS

A comparative market analysis (CMA) should always be used in determining a price evaluation. It is the most powerful tool in determining a reasonable appraisal of your property. A CMA is developed by us, by comparing similar properties in the same areas. It is an important tool used to determine the market value of your home. A CMA involves looking at various records or reports available to better understand market conditions.

In preparing a CMA, we will look at the following:
• Agent experience and knowledge of the area based on personal and agency listings & sales.
• Market Statistics – current to 48 hours and based on actual SOLD price of all listed properties of similar characteristics in the area. These homes will be comparable in size and together comprise a factual record of what buyers will pay.
• Market Statistics based on properties of similar characteristics currently available on the market. These homes provide a benchmark against which your home will be priced.
• Available pricing of properties of similar characteristics in the area that have been on the market for 90 days or longer – i.e. properties not selling. These homes illustrate the dangers of overpricing your property.
• Deeds office search – history of property sold, however, latest past 6 months are generally not available. Due to the nature of the current property market, it is not always viable to include properties that were sold more than 6 months prior to date of listing.
• Other available means.

Together the information will assist us in determining the ideal asking price for your home.

A CMA is therefore an informed opinion and not a guarantee by us to what your final sale price will be. “Newspapers” do not sell properties, Agents do! You need maximum exposure possible in order to generate the highest price possible!

EXCLUSIVE COMMUNAL LISTING SYSTEM MANDATE

Advantages:
• The system allows properties to be PRICED RIGHT.
• Maximum exposure to the market, channelled through one Agency.
• Agents work together to the benefit of the seller.
• Agent controls the selling process.
• Open hour allows the property to be ‘exhibited’ to as many agents as possible.
• Agents call at one time – less inconvenient.
• Open hour allows all agents to value the property, thereby establishing a market related selling price.
• Open hour is to inform and advise the seller of the professional opinion of other agents.
• Reduces marketing time.
• Agents usually have access to an existing buyer base.
Disadvantages:
• Possibility of same buyers being brought to the home more than once which results in last minute cancellation of appointments.

SOLE MANDATE

Advantages:
• Total control through one Agent of buyers visiting your home.
• Commission structures are easily negotiated.
• Sole mandates typically receive agencies highest priority.
• Comprehensive CMA’s are done to ensure property is priced right.
Disadvantages:
• Perception that sole mandates bind too tightly legally.
• Concern that other agents may have buyers.

OPEN MANDATE

Advantages:
• No contractual commitment.
• Available to all agents.
• May sell privately and avoid paying commission.
Disadvantages:
• Agents reluctant to work the property as no guarantee of return for effort.
• After the initial 6 week period, agents tend to forget about the property resulting in limited exposure
• All UNSCRUPULOUS agents may work your property.
• You open yourself up to liability of ‘double commission” as effective cause of sale can be argued.
• Too many “For Sale” boards, gives the perception of either being overpriced or that there is something wrong with the property. The consequences are numerous and unpleasant.

PRIVATE SALE

Advantages:
• No contractual commitment.
• No commission payable.
Disadvantages:
• No support network as far as the sale is concerned. Estate agents network regularly with other agents, bond originators, bank officials and attorneys.
• Typically no access to property statistics which may lead to fixing a wrong price.
• Limited exposure to potential buyers, which theoretically means your home will take ten to fifteen times longer to sell as agents usually have access to an existing buyers base, private sellers don’t.
• Typically the buyers you will encounter have not been qualified as far as finance is concerned.
• The longer the home is on the market, the lower the selling price.
• Perception of “private sale” is an overpriced property or there is something wrong with it.
• Typically the selling/buying process begins AFTER the buyer leaves your home. I.e. contract negotiation, liaison with attorneys etc.
• Most buyers find it extremely awkward to negotiate or even talk directly with sellers & therefore avoid private sale properties.
• The majority of qualified buyers are working with experienced real estate professionals.
• Only Estate Agencies may advertise in local property finders and normal advertising costs in local papers are high.
• Notably, YOU ARE OPENING UP YOUR HOME TO ANY STRANGER OFF THE STREETS.

THE COMMUNAL LISTING SYSTEM

This system is a consumer service by which Estate Agencies cooperate and combine their resources to offer a selection of properties to buyers and sellers.

HOW DOES IT OPERATE?

The seller provides a written exclusive shared mandate to place the property on the system. The member receiving the mandate notifies all participants. This is done electronically to participating members in the area. In this way all the members have the details of your property.
The listing agent arranges an Open Hour to introduce the property to other members. This enables members to familiarize themselves with all the features and ensures wide exposure of the property to all potential buyers. Furthermore, valuable opinion regarding market value and marketability of the property is given.

THE COMMUNAL LISTING SYSTEM CHOICE

1. Wider and more effective exposure of your property.
2. Large pool of potential buyers.
3. Market related pricing advice.
4. The best possible price in the shortest time.
5. Once-off viewing during Open Hour by agents.
6. Minimum inconvenience.
7. Liaise with only one member of your choice.
8. A proven and recognized marketing system.
9. All members are electronically connected.

BENEFITS TO BUYER
1. Extensive selection of properties in all areas to choose from.
2. Properties are usually correctly priced.
3. Properties may be viewed through a member of your choice.
4. More convenient.

THE COST
1. There is absolutely NO EXTRA COST to the seller OR buyer!!
2. The professional fee is shared between the members on a predetermined basis.

ADVERTISING
1. The opportunity of advertising on the Internet is made considerably easier. Members transfer the advertisement electronically to the internet.
2. All forms of advertising is free.

CODE OF CONDUCT
1. The communal listing system’s Code of Conduct protects the interest of both sellers and buyers.
2. The Code of Conduct of the Estate Agency Affairs Board is applied by the communal listing system’s management.
3. The members strive constantly for excellence based on Integrity, Competence and Commitment.

PLEDGE
Members are pledged to provide professional services based on ethical standards.
FOR MORE INFORMATION CONTACT US on one of our emails or cell phones.

Offer to purchase procedure:

1. Buyer puts in an offer to purchase (OTP).

2. The offer to purchase is presented to the seller.

3. If seller accepts offer:

Buyer documents required on acceptance of the offer (Fica documentation):
• Copy of ID documents,
• Payslip/Proof of income,
• Latest 3 months bank statements,
• Proof of residence,
• SARS tax number

4. Application for finance on behalf of buyer is submitted to the bank for approval.

5. If bank bond is granted to buyer:

Seller documents required by bank bond attorney appointed (Fica documentation):
• Copy of ID documents,
• Bond statement if applicable
• Tax certificate or tax number,
• Electrical compliance certificate

6. Buyer pays all relevant costs like deposit and transfer fees to the attorneys.

7. Bank bond and property deed are registered.

8. Buyer takes possession of property.

Basic outline of a standard property transaction:

Basic outline of a property transaction

Basic outline of a property transaction

SELLER COSTS SUMMARY:

Gross Selling Price (market value)
Less:
Agent Commission
Outstanding Bond
Bank bond attorney cancellation fees + VAT (always about 1% of outstanding bond)
Bond Penalties (Varies but normally about 3 months interest payments)
Pro-rata Rates & Taxes / Levies (typically 3 months in advance)
Electrical Clearance Certificate
Entomologist Clearance Certificate
Gas Installation Clearance Certificate
FICA Costs
Outstanding Taxes (if applicable)
= NETT SELLING PRICE

DOCUMENTATION REQUIRED FOR TRANSFER:

Copy of ID’s
Copy of Marriage Certificate (AN Contract, divorce decree)
Copy of Rates (and Levies) Account
Copy of Bond Account
Proof of Residence (not older than 3 months)
Income Tax Numbers
Title Deeds (If in Seller’s possession)
Electrical Certificate of Compliance
Entomologist Clearance Certificate
Gas Installation Clearance Certificate

If a Company:
All of the above, plus:
Letter on Company Letterhead confirming person signing contract authorized to do so
Company Registration Documents

ELECTRICAL CERTIFICATE OF COMPLIANCE

What is covered in an electrical certificate of compliance and what is not?

The following items are covered:

All Distribution Boards
All circuit breakers and protective devices
All wiring and cables from Main Board to point of consumption (including solar panels and geysers)
Wiring of fixed appliances
Earthing
Bonding (similar to Earthing) of all extraneous metallic parts: e.g. Hot water cylinders, metallic pipes, satellite dishes, aerials, downpipes, gutters, steel roofs, carports.
Light switches
Plug points
Isolators for fixed appliances: e.g. Stoves, extractor fans, motors
Cable that runs from isolator to a fixed appliance: e.g. From the isolator to stove unit
Swimming pool distribution boards
Cable that runs from board to pool light
Pool light transformer
Timers
Photo cells
Transformers: e.g. For down lights transformers
Positioning and application of light fittings, appliances, switch gear and protective devices.
Earthing and wiring of lights
Disconnecting devices to be installed within 1.5m from appliance
All cable joints in roof to be done correctly
Cable type, size and application

The following items are not covered:

All fixed appliances like: e.g. Stoves, extractor fans, geysers
Cylinders, underfloor heating mats
Secondary wiring to under floor heating mats, solar geyser and solar panels
All Motors ( Including garage doors and gate motors)
Ceiling fans
Light fixtures, Heater towel rails
Changing of globes, light fittings
Anything fed from a plug top
Garage and gate motors
Extension leads, energy dispensers
Bore hole pumps
Speed heat
Pool globes
Maintenance irregularities
Wiring past the council mains(All wiring from the supplier to municipal meter and municipal switch)
Inaccessible areas – which are noted in bold on report and certificate
Sprinkler system
All disconnected circuits or lights.
Flexible cords longer than 3m are not recommended

The banks require 90 days (3 months) advance notice from an owner with an outstanding bond balance, of the intention to sell, otherwise interest penalties will apply.

Our pledge to any seller of a property:

OUR OBJECTIVES: To assist the seller in obtaining the highest possible price in the shortest possible time.

OUR MARKETING PLAN:

• We will make a thorough inspection of your home and make detailed notes of the accommodation, features and any other aspects that will be important to potential buyers.
• Be assured of our loyalty and allegiance, we will be available at all reasonable times daily and will soul heartedly serve you to the best of our ability.
• We will put up a “FOR SALE” board for maximum market exposure once we have agreed upon the mandate.
• Together we will discuss any cosmetic “touch ups”, which will improve the marketability of your home. (Please refer to ‘Grooming your property to sell’)
• We will immediately contact all qualified buyers on our company files and arrange appointments to view.
• We will place your property onto the Communal Listing Service if you so choose & if available in your area.
• We will place appropriate advertisements on the relevant websites and internet portals. Your property will appear on all the mainstream property websites available to us.
• Together we will arrange show houses.
• We will also inform you as to any changes in the market with regard to price and demand and the effect thereof on the sale of your house.
• We will follow up the sale transaction and keep you informed of the progress after the offer has been concluded.

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