Negotiating the sale of a house
Category News
Welcome to 2021! We trust this will be a healthy and prosperous year for you and your loved ones.
We head into the year with strong fundamentals for the local market. It remains favourable for buyers making it an opportune time for sellers but offers may not always be at the high end of the price scale or flowing as fast and frequent as in a seller's market.
It is therefore pertinent to provide some insights into negotiating the sale of a property. It is not always clear cut and often involves intricate negotiations, counter offers, contingencies and creative thinking to strike a win-win deal. Start by choosing a credible agent who will have their reputation and your best interest at heart, especially in these challenging times.
It is more critical now than ever before to ensure that your agent is provided with a clear sole mandate to ensure he/she is providing you with all the knowledge, feedback and insight required to ensure a successful sale.
Considering the offer
In this market you should not just dismiss any offer, provided it is a serious offer and a fair market price. Bear in mind that almost everything is negotiable but take emotion out of the equation. Do not feel offended if the price offered is below what you thought you might get for your home. There is often a disconnect between what sellers believe their property is worth and how the market sees it.
Contingencies and terms
It is not uncommon to get an offer contingent upon certain actions which need to be fulfilled before the sale can proceed. It commonly relates to finance where the purchaser needs to release invested funds, pay a deposit or obtain a mortgage loan by a specified date.
Subject to the sale of another house
Subject to sale offers (STS) are ever increasing and need to be carefully considered. When considering these types of offer it is important to understand: (1) the time frame to sell the other property, (2) where is the other property situated, (3) what the market is like in that particular area, (4) whether the other property is priced competitively, (5) who will be marketing the other property, (6) whether they are they the strongest agents in that area to ensure the sale of the property, and (7) what my agent's view is on the strength of the offer given the STS.
Other contingencies could relate to repairs to be affected, fittings or furnishings such as window coverings to remain or the purchaser wishing to occupy the property prior to registration of transfer. These are usually relatively easy to deal with to clinch the deal.
Countering the financial terms might include asking the buyer to provide a bigger cash deposit to provide more surety for the seller. A credible agent will ensure the dates attached to the fulfilment of the contingency clauses are as tight as possible.
The "72-hour clause"
The inclusion of this clause provides vital protection for the seller (and buyer). It allows the seller to accept the offer but continue marketing their property. If a better offer is received before fulfilment of the conditions, then the purchaser will have 72-hours to either comply with or wave the contingencies. If the purchaser is unable to do so, then the seller is free to accept the other offer.
Countering the price offered
A lower price offered is usually the sticky point. When an offer is presented, the seller can accept it as it is, reject it, or reject it with a counteroffer. Sellers should almost never reject a serious offer without a counteroffer. Caution should not be thrown into the wind with counteroffers as buyers are fickle and easily swayed to other properties which they may also be interested in.
A serious offer shows the buyer is interested in the property and may be willing to give a little more but do not push too hard as it may put the buyer off. Research shows that in over 71% of instances, the first offer is the best.
Remember, a cash offer with few contingencies means money in the bank as soon as possible. If conditional upon a mortgage loan but with a substantial deposit, it shows the buyer is invested in the deal.
Seeff Hout Bay and Llandudno achieved outstanding results for our clients last year and emerged as the market leader. The Deeds Office is open and operating and buyers are able to view properties. Seeff's agents are fully equipped with the necessary safety protocols and PPE to enable sellers and buyers to proceed with their property needs without delay.
Home is our Story and property our passion. It is a new year and time for new property goals. Feel free to call, text or email us as you do not want to miss out on this positive phase for the property market.
Yours in Property
Stephan Cross
Sales Manager - Seeff Hout Bay and Llandudno
Author: Seeff
