Mistakes to avoid when buying or selling a home
Category News
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 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.
READ: First-time homebuyers' fears - how to overcome them
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.
READ: 6 Reasons why a deposit is important when buying property
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 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," says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
READ: Buying a house? How to make sure your OTP is successful
Take a look at a few tips previously shared by David Jacobs, Gauteng Regional Sales Manager for the Rawson Property Groups.
Choosing the right neighbourhood
"The area you live in plays a huge role in your ability to enjoy your home. It can also directly affect the value and growth potential of your investment," says Jacobs. "Since you can't just pick up and move your property if you don't like where it's located, finding a neighbourhood that meets your needs should be the first step of any house hunt."
Price
Jacobs says the easiest way to narrow your neighbourhood choices is to exclude those that fall outside your affordability.
"The best buys are in neighbourhoods with property prices at your affordability level and higher."
Amenities
If a neighbourhood is priced right and safe, it's time to consider its amenities. Does it provide access to the essentials you need for everyday life?
"Make a list of your must-haves, from public transport to good school zones," says Jacobs. "Remember, a property is a long-term investment, so don't just think of your needs now. Imagine what you'll want in five- or ten-years' time as well."
Connection
Amenities are only part of a neighbourhood experience. If you're going to live there, it's also important to feel like you connect with the community on an emotional and social level. That means finding somewhere close to important friends and family, with an atmosphere you enjoy (busy and bustling or quiet and peaceful) and neighbours you can see yourself befriending.
Choosing the right home
Once you've settled on your ideal neighbourhood(s), it's time to dive into the real house-hunting. Jacobs suggests starting your search on the major online property portals, but also approaching a local real estate expert with your property wish list.
"Most properties are listed online, but there are still gems that sell before they're ever made public," he says. "If you want to be in on that action, you need a real estate agent keeping an active eye out for properties that meet your needs."
As an added bonus, local real estate agents will be able to give you the inside scoop on the neighbourhood, confirming your choice or raising red flags you'll be glad you knew before buying in.
Good structure
As for defining your needs, he says: start with the essentials. The right property size, the right number of bedrooms and bathrooms, and any other must-haves like secure parking and a home office, for example.
"Try not to be put off by surface aesthetics like paint colours," he says. "Good basics in good condition are much more important than a seller with the same taste in décor as you."
Again, Jacobs reminds buyers that the right property should accommodate their needs for several years to come.
"Make sure your must-haves cover future needs as well," he says. "You may only need two bedrooms for now, but you'll wish you had more when that work-from-home opportunity or second child comes along."
Good condition
Unless you're specifically looking for a fixer-upper, you're going to want to find a property in good condition as well.
"Sellers are required to provide a list of any defects, but these aren't guaranteed to cover absolutely everything," says Jacobs. "It's still essential that buyers do their own investigation and book a professional home inspection before they buy."
Good layout
It's relatively easy to knock down a wall here and there to improve a property's flow, but it's a whole other ballgame to move a kitchen or a bedroom to a different part of a house.
"Make sure the basic layout of the property supports your lifestyle," says Jacobs. "So, if you're an entertainer, look for a good flow between kitchen, dining room and outside areas. If you have kids, make sure there is enough room indoors and outdoors for them to play and do their homework.
Room for improvement
It's always nice to put your own stamp on a new home, but if upgrades are part of your plan, he recommends making sure your property has room for improvement.
"If you're buying at the upper limit of a neighbourhood's price range, there's a risk that any improvements you do won't add materially to your property's value," he says. "Rather buy a little lower if possible so your efforts will pay off in the long run."
No major compromises
No property is perfect, and most buyers will need to make minor compromises. However, he recommends avoiding properties with major features you absolutely dislike.
"Don't compromise on the big things," he says. "If you're not that into Victorian houses or can't handle face brick, it's not worth trying to convince yourself to live with these feelings. You need to be proud and happy and comfortable in your home. If there's anything that materially and irreversibly detracts from that, it's not the property for you."
https://www.property24.com/articles/mistakes-to-avoid-when-buying-or-selling-a-home/32079
Author: Property24