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Selling your property
 

A 1.     How to find a realistic price?

It has been proven that the longer a property stays on the market, the less attractive it becomes to Purchasers and this may occasionally result in a much lower selling price than initially planned.

It’s also important to note that nine out of ten Purchasers start their home search online. Therefore, it is crucial to consider this when setting an asking price for your property.

Most property search portals require the user to enter a price range to narrow down their search options. If the asking price is R755 000 and the Purchaser’s price range is from R700 000 to R750 000, the listed property will be missed by prospective Purchasers.

A Comparative Market Analysis (CMA) is crucial because it compares your property to properties that have been sold as well as those still on the market in the area. An agent can advise you or you can request an attorney to assist you.

Remember that deals die quickly if the parties are not open to negotiating.

A2.      What is the cost of selling?

Rates Clearance figures:

The attorney will request the Municipality to render a rates clearance certificate. The figures will include the current account and an estimate of 3(THREE) months’ levies in advance.

The certificate will only be valid for a period of 2 (TWO) months and forms part of the necessary documents that need to be lodged in the Deeds Office. The Seller needs to pay the fees reflected on this document up-front in order to obtain the certificate.

Should the property be registered within the 2 (TWO) months, a credit balance will reflect on your municipal statement. The attorneys will furnish you a letter confirming the registration date and the Municipality will have to refund you the credit upon receiving your request for payment thereof.

Bond cancellation

The current bond over your property needs to be cancelled and the balance owing, needs to be paid from the purchase price to your bank. The transferring attorneys together with the appointed bond cancellation attorneys will see to this.

The Seller is liable for the payment of the cancellation costs of the bond cancellation attorney, which will approximately amount to ± R4000.00 on average.

Levies

Should the property be subject to a homeowner’s association or if the property is a section title unit, a clearance certificate will also be needed from the association or body corporate confirming that all the levies have been paid. The figures will contain the current balance and an estimate of 3(THREE) months. Should the property be registered within the indicated 3 (THREE) month period, the credit will be paid back to the Seller.

The clearance figures need to be paid upfront in order to obtain the certificate before registration.

Electrical Certificate of Compliance (“COC”)

Normally the deed of sale agreement contains a clause that a COC needs to be furnished to the Purchaser. The Seller is liable for the costs associated thereto. This will contain the cost of the certificate and any remedies or repairs that needs to be done. The certificate needs to be furnished to the Purchaser before registration of the transfer of the Property.

A3.      Appointing an Estate Agent / Private sell

POSITIVES IN USING AN ESTATE AGENT:

While you may save on commission when selling your home, yourself, you will not be able to generate the exposure for your home that an agent can give you. In addition to this, agents have knowledge of all the legislative procedures that accompany the selling of a home and will be able to guide and advise you on every step of the way, saving you time and taking away unnecessary stress.

·  Selecting a reputable agent with area experience will put the Seller on the right path to setting the correct asking price;

·  An agent will have access to resources and information that the homeowner will not;

·  They will base their assessment on facts and figures, without bringing emotion into the equation;

·  An agent will be able to provide an unbiased opinion, looking at the situation from all angles, such as the home’s features, the local market, recent sales and more;

·  They will ensure that the potential Purchaser is not a security threat before he/she arrives to view your home;

·  They will have an extensive database of potential Purchasers and

·  They will assist Purchasers in raising finance.

NEGATIVES IN USING ESTATE AGENT:

You might save the commission or you will be able to reduce your selling price.

However!

·  Are you able to deal with criticism of your home?

·  Have you got security backup to avoid vulnerability from threatening strangers that might view your home?

·  Have you got the available time to show your property to potential Purchasers? and

·  Have you got the necessary inclination and ability to negotiate the sale to a successful conclusion?

If you have a potential Purchaser there is no need to go to an estate agent. Your attorney will be willing and able to draw up the purchase agreement and follow the registration process.

A4.      Giving an Agent a sole mandate or not?

When you grant a sole mandate to one agent they will be more motivated to sell because there is no competition. Agents spend more time and more money (like advertising expenditure) on sole mandates.

You should, however, consult your attorney. You should negotiate the effect if you obtain a Purchaser yourself within the sole mandate period. You should also negotiate the extra steps the agent is going to take. Always set a termination date for the mandate.

A5.      What repairs and improvements must you do to your house to improve the selling success.

Although it would be advisable to declutter as much as possible and do minor fixes to your home before a show day, a full revamp is not necessary in most cases. Not only do you stand the chance of overcapitalising, but the Purchaser might want to revamp the home themselves to their own specifications.

On show days, it's essential that you stand out from the crowd. Highlighting your home's finest features could help turn a browser into a Purchaser.

A few tips and tricks to look out for are:

·  Keep the driveway neat and tidy at all times and consider minor renovations before a show day if necessary;

·  A well-maintained and colorful garden adds to the appeal of a property;

·  A clean swimming pool with clear water is important;

·   Make sure the carpets are clean. Unpleasant smells, especially those of pets, can be detrimental on a show day;

·  Light is important. Open all your blinds and curtains to let natural light in, and any decorative or track lighting should also be switched on;

·  Ensure that the house is neat and free from clutter; and

·  Make sure the kitchen countertops are clean and hang fresh towels in the bathroom.

A fresh coat of paint can work wonders to make your home look that much more appealing. If you are on a budget, narrow your focus to areas or rooms that look like they need some freshening up. Before painting, address any damp issues or peeling paint and fix any chips or holes left from nails in the wall.

A home that is in good repair will definitely be more attractive to a Purchaser than one that has repair work needed. From the big things like plumbing and plug points to small details such as checking all cupboard and door hinges, locks and swimming pool cleaning apparatus, Sellers should walk through each room and the outdoor areas and check them carefully for minor repairs that could easily be undertaken.

Always highlight the best ventures of your house for example the location, security system, proximity to schools, eco-friendly features, technology-friendly, kitchen, floorplans, entertainment area, great view, garden.

B1.      Method of Payment/ time periods

Make sure that the contract contains a clause wherein it is clearly stated when the guarantees should be issued.

Make sure that the time afforded the Purchaser to obtain a loan or if he needs to sell his house is clearly indicated and not too long.

If it is a cash purchase, make sure that the purchase price is to be paid into your attorney’s trust account within a short period after signature i.e. 7 (SEVEN) business days after the date of signature.

B2       Suspensive conditions / bonds.

If the deed of sale agreement is subject to a suspensive condition, for example the obtaining of a bond, the contract will automatically lapse with the expiring of the period allowed for the bond to be approved. There will thereafter be no binding contract anymore. Should you wish to give an extension, it must be in writing before the expiration date. Should you have failed to do this, then you need to sign a reinstatement agreement to give the Purchaser an extension, in order for the contract to be valid.

N.B! Remember that you cannot sell you property to someone else while waiting for the period to expire. If you do, it must be subject to the previous sale.

The normal period allowed for obtaining a bond is 30 (THIRTY) days.

B3       Occupation / Occupational rent

Always make sure to agree on the occupation date of the property. It is very risky and unwise to allow for occupation if the Purchaser has not yet delivered guarantees and has not yet signed all the transfer documents.

Always agree on an occupational rent amount, even if the occupation is initially agreed to be the date of registration. It may happen that registration is not at month end, and you might agree later in the process, for occupation to be on a date other than the registration date. In such a case the occupational rent amount will already be agreed upon and you do not have to negotiate an uncomfortable rent.

B4       Voetstoots / Defects in the House

It is better to declare all the defects in your house that you are aware of, except for the obvious visible defects. A Purchaser has the right to sue for damages due to a misrepresentation regarding defects of your house.

The voetstoots clause will protect you against any claims of the Purchaser regarding latent (unseen) defects, that you were not aware of. Make sure that you have a satisfactory voetstoots clause in your contract.

B5       Permanent fixtures

Remember that all permanent fixtures form part of the house you are selling. You may not remove permanent fixtures from your house when you vacate your property. If something is cemented or nailed down or fixed in such a way that removal would damage the property or the room it's most likely a fixture.

The golden rule is to stipulate in the contract anything that you consider not to be a fixture and which item you intend to remove. To judge if an item is a fixture or not, has let to many court cases and unhappy Sellers and Purchasers.

B6.      Which attorney must be the transferring attorney.

Not all attorneys are registered as conveyancers. To qualify to draw up transfer documents and sign these documents, the attorney must have a separate additional qualification and must be admitted as a conveyancer.

The conveyancer is your choice. Make sure you appoint your conveyancer/ attorney to see to the transfer. He is the person who will best protect your rights and has the power to dictate the speed in which the transaction is completed.

B7       Estate agent commission

Estate agent commission is negotiable. The norm for residential property is 7.5% but for farm properties of commercial properties it can go up to 10%. Estate agents are sometimes willing to negotiate for a lesser percentage if the property is of a high value.

Negotiate the commission when listing your property but remember that only monkeys work for peanuts.

C1.      What is the process?


C2.      What can I do to speed up the process?

·  Make sure that you furnish the estate agent with all your details, including Tax numbers and bond account number, if applicable.

·  Make sure your Tax affairs are in order.

·  Make sure that your rates and taxes accounts with the Municipality are in order.

·  When requested to give information, sign documents or pay for clearance figures do so as quickly as possible.

C3.      Capital Gains Tax.

·  Your primary residence is exempt from capital gains tax should you make less than R2 Million gain.

·  For Natural persons an inclusion rate of 40% is applicable.

·  For any other entity the inclusion rate is 80%.

Remember that the capital gain is added to your yearly income and then calculated on the income tax rate of the entity. For natural persons the effect would thus be between 0-18%, for other companies and Close Corporations 0- 22,4%. For trusts it is 36%.


DupWest - Selling your property.pdf

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