As attorneys we normally only get involved at the end stage of the home selling process, but this also means that we encounter all the pitfalls and problems that Sellers experience when selling their homes. We have identified the top tips in making the process smoother and easier.
1. CHOOSING AN AGENT OR SELLING PRIVATELY?
In South Africa it is not compulsory to use the services of an estate agent and some clients prefer to sell their property privately. If you do decide to sell privately, ensure that you have a conveyancer on hand to assist with the drafting of the contract and to give advice on how to structure the transaction properly. It is not advisable to use pre-printed contracts as these contracts deal with general conditions and your property requirements are very specific.
Most clients however prefer to use the services of an agent. Ensure that you sign a mandate with a reputable agent who takes the time to explain all the elements of the mandate and sales contract to you. It is also important to ensure that the agent prices your property correctly. The agent proposing the highest valuation does not necessarily mean they are the best agent for the job. Rather listen to the agent who will give you an honest valuation – this will save you time and money.
2. SOLE MANDATE OR OPEN MANDATE?
Any mandate signed by you and an agent is a contract and will determine what the agent can or cannot do. Ensure that you know what you are signing, and the time period involved. A one month open mandate with a reputable, hardworking agent will mean more than a 6 month sole and exclusive mandate with an unscrupulous agent. Your mandate should contain all the marketing that the agent will do on your behalf as well as specific requirements e.g. if you only want to sell once you have another house to purchase – add it to your mandate contract.
Furthermore, negotiate your commission payable with the agent prior to signing your mandate. Once you have signed there is no going back on this agreement. Ask your conveyancer to check your mandate before signing,
3. DISCLOSE ALL THE PROPERTY DEFECTS
Any defect that you know about must in law be disclosed to the purchaser. If you use the service of an agent, ensure that they complete a defects list and that you mention everything to them in writing. This will protect you later if the purchaser claims they did not know about a certain defect.
Many transactions have cost sellers a lot of money as they attempt to hide certain “problems” in relation to the property. Problems with a leaking roof, damp problems and faulty alarms or ovens are some of the main problems picked up and cause major delays or even litigation.
“If you can’t fix it, disclose it”
4. WHAT MUST STAY AND WHAT CAN GO
All fixtures in a property normally forms part of the property and can therefore not be removed. We often find that Sellers removes certain items (e.g., alarms systems, security cameras, chandeliers and even pool equipment or garden ornaments) and then must either return or replace the item at the same value. Determine before hand what you want to remove and specify those items in your deed of sale.
5. FINANCIAL IMPLICATIONS
Ensure that you know all the costs involved in the sale of a property and budget for unexpected costs related to the transaction. Also ensure that you know when these expenses must be paid and that you have cash available if you have to pay for the expense before the property is transferred.
Costs to consider include Agents Commission, Rates & Taxes (normally including 3 months in advance), Outstanding Levies, the settlement amount of your bond, the fee to cancel your bond, Compliance Certificates (See 6 below) as well as any repairs associated with these certificates and legal fees (e.g. if your title deed is missing and must be replaced).
If the property you are selling is not your primary residence, there may be capital gains tax involved. Talk to your tax consultant to determine the exact amount of tax applicable.
6. COMPLIANCE CERTIFICATES
One of the important documents that you as Seller will have to present is the compliance certificates (e.g. electrical, plumbing, beetle, gas, electric fence etc). Most certificates are legal requirements and will certify that the installation meets the legal requirements. Ensure that you know exactly which certificate you must furnish and what exactly they cover.
7. GIVE NOTICE OF YOUR INTENTION TO CANCEL YOUR BOND TO THE BANK
Most financial institutions require a 3 month notice period of your intention to cancel your bond. If your property is transferred during this 3 month period, you will be liable for early termination penalties.
8. GET YOUR DOCUMENTS IN ORDER
There is a lot of paperwork involved in selling your property. Ensure that all your initial documents (house plans, guarantees for appliances e.g., air conditioners, stoves, ovens, garage door motors etc.) are in order to save yourself time and additional stress. You will also be required to present your FICA documents to the agents and the conveyancer.
9. BUYING OR RENTING AFTER YOUR SALE (THE “OCCUPATION” ISSUE)
Once you sell your property the important question is “where will we go and when do we move out”. Check that your contract specifically includes a date that the purchasers can move into the property together with the amount of occupational rent they will pay. If you are purchasing a new property, ensure that the dates on the new purchase coincide with the dates where you are selling.
10. GET ADVICE BEFORE SIGNING ANY DOCUMENTS
Mistakes on contracts can be time-consuming and expensive – confer with one of our experienced conveyancers before you sign any contract.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)