If you’re considering selling your home, you might have heard about the benefits of private sales – but what’s involved, and what are the risks? Selling your own home isn’t as easy as 1-2-3. But follow our guidelines and you can meet the legal requirements while minimising risk and maximising savings.
What will you save?
First, you might ask, is selling my own home worth the effort? Well, the average estate agent’s commission is at least 5% and, more likely, 7% (if not 7.5%) of the total value of the sale.
So on a sale of R1 million, you’d be saving between R50 000 and R70 000; money that you could probably put to better use elsewhere. If that type of saving sounds worthwhile to you, read on to learn how to manage the sale and not lose in the process.
A step-by-step guide to selling your home
Step 1: Value your property
Whether residential or commercial, properties are normally priced at market value. This is the price it’s estimated that buyers will be prepared to pay in the current period.
We all know that the property market fluctuates (sometimes even wildly) so you’ll need to carefully research the following factors in order to establish the realistic market value of your home:
- What have other, similar properties in your area sold for in recent months? A six-month period is considered indicative of prevailing market conditions. And similarity should include factors such as erf size, price per square metre, number and type of rooms, and so on.
- What is the municipal valuation of your property? Municipal valuations are often below market value, but offer a good indicator of a very minimum price that you could ask for, or even accept.
- What is the value of your bond? Hopefully, by the time you’re ready to sell your home, its bond value is below the market value. If it isn’t, you may want to hold on, or work out the cost of servicing the bond in relation to selling at a price that’s below bond value.
- What does an estate agent say your property is worth? Estate agents take factors 1 and 2 into consideration. They’re also likely to give you a detailed report of their comparative analysis of the market value of your home. If you’re not planning to use an estate agent, you may feel it’s not right to ask them to value your home, but it’s up to you.
Step 2: Advertise your property
You can advertise your property in the simplest way by putting a stake and a sign in the ground on your verge. In addition, the internet has introduced a host of new options for private sellers, with many sites offering private sale listings. Some examples are steeple.co.za; privateproperty.co.za; noagent.co.za and trovit.co.za. Note that it’s a good idea to investigate the charges (or limited free periods) that each site asks.
Step 3: Manage viewings by potential buyers
Before accepting viewings or hosting a show day, take time to dress your home for sale success. Neat homes sell faster because potential buyers are more likely to want to live in them. So clear out the clutter and spruce things up to the extent that your budget allows.
This is an excellent time to consider using self-storage – pack away that old sofa that’s a bit of an eyesore, kitchen appliances that normally clutter the counters, bulky sports equipment, personal knick-knacks and anything else that could detract from the impression you want your home to make.
Once that’s done, get ready to manage the influx.
In South Africa, security is often our primary concern. So how do you manage the potential risk of strangers who might present danger when viewing your home? Here are a few easily implemented tips and rules to work by:
- get ID numbers and contact details before potential buyers arrive
- ensure that you are not alone when buyers arrive
- if your gut tells you the situation is dangerous, don’t ignore your instincts – leave and/or use the services of your alarm/security company.
Step 4: Accept offers – the legal paperwork needed
Once you’ve accepted an offer in writing, your acceptance is legally binding. So be sure that you want to accept the offer.
You could build in a seller’s escape clause that allows you subsequently to accept higher offers, or make the offer conditional on the buyer meeting certain conditions. But in principle, once you and the potential buyer have signed an agreement, you’re legally bound.
To be official, the agreement must be witnessed. It must state your and the buyer’s details and the details of the offer – including price, property and time period. It must also confirm that you’re the rightful owner.
Step 5: The transfer – who must help and what are the costs?
You can’t do the transfer on your own. For the legal transfer to happen, you need to appoint a conveyancing attorney. If your home is still subject to a bond, you’ll also need an attorney to cancel the bond.
You’ll be liable for any commissions (if you used a website for instance), and for any clearance certificates – for example, for rates, water or electricity.
Also, banks recommend that you advise them of the likelihood of sale – in other words, once you’ve advertised the property for sale.
Step 6: Sold!
So not as easy as 1-2-3, but definitely manageable. And once the transfer has gone through, all that’s left for you to do is to pocket the savings. Good luck!
At XtraSpace, we provide secure, affordable self-storage units, ideal for storing items while you show your home to prospective buyers. Contact us for more information or browse to find a branch near you.