In today’s tough economy, buyers and sellers really don’t want to have any money left on the table owing to avoidable mistakes. By doing your research and leaning on the advice of a reliable real estate professional, buyers and sellers can give themselves a better chance of avoiding the common pitfalls associated with property transactions.
To help all who are about to embark on a property transaction, RE/MAX of Southern Africa shares some of the most common mistakes and how to avoid them…
Pitfall #1: Overlooking associated costs
Failing to budget for the host of associated costs is one of the most common mistakes both buyers and sellers make. A lot of the expenses will need to be paid before the transfer will go through, so it is important to have the money readily available before an OTP is signed.
For the seller, some of the upfront costs to be prepared for include the settlement amount required for acquiring a rates clearance certificate and the cost of acquiring the required compliance certificates (e.g. electric, plumbing, gas, beetle, electric fence).
For buyers, some of the upfront costs to be prepared for include bond initiation fees, transfer duty, and transfer costs.
Pitfall #2: Emotional decision-making
Although property transactions are often deeply personal, it is also important to be able to take the emotion out of it at certain stages of the transaction.
For the seller, it is important not to allow their own sentimental attachment to the property to interfere with the sales process. Buyers need to be able to picture themselves living in the home, and this sometimes means that the home will need to be updated and decluttered of personal items to help make the home more appealing to buyers.
For the buyer, it is important to factor in some logical and financial considerations before making a purchase. Ask yourself whether the home stands to appreciate in value over time.
Because property is a long-term commitment, it is also important to think about your long-term plans and not just your immediate lifestyle needs.
Pitfall #3: Not reading the fine print
Another common mistake made by parties on both sides of the transaction is failing to read through and understand every clause in the Offer to Purchase (OTP), as this is a legally binding document that outlines all the terms of the sale. This is what will be used to settle a dispute should one occur between the buyer and the seller at any stage of the transaction.
For sellers, it’s important to focus on the suspensive conditions that the buyer is stipulating in their offer, as these conditions will have to be met (sometimes at the seller’s expense depending on what the condition is) before the sale can go through.
For buyers, it’s important to focus on the property defects disclosure form and make sure that any issues that they want to be fixed ahead of transfer are clearly stipulated on the OTP so that the seller can address the issues before it’s too late.
“By leaning on the advice of a reputable real estate professional, you can easily avoid these common mistakes and navigate the home buying or selling process more smoothly to achieve better outcomes,” concludes Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
Writer: Kayla Ferguson
