Key questions to help you make a fair offer to purchase
Category RealADVICE
If you're a buyer looking for a new home, you will naturally ask all sorts of questions about the location and condition of any property you view, but there are several others to ask too, before you sign any offer to purchase.
That's the advice of Gerhard Kotzé, CEO of the RealNet property group, who says prospective buyers should also ask the property professional handling the sale for the following information, because it will help them tailor an offer that meets both their needs and those of the seller:
- The reason for the sale: "This is not idle curiosity, it's just good sense. A seller who needs to relocate urgently for work, for example, might be happy to accept a lower price if you are able to pay cash and finalise the deal quickly. Similarly, you should be informed if the property is being sold through a bank-assisted sale programme as there may be certain benefits to be gained by making a quick decision, such as a reduction in bond registration fees or legal costs.
"On the other hand, if the home is being sold because of a divorce or perhaps a death in the family, the transaction could get bogged down in legalities, and you have a right to know what to expect."
- Terms of the contract: You also need to get into the nitty-gritty of the proposed sale agreement, he says, including the expected occupation date and what occupational rental might be payable under certain circumstances. "It is possible, for example, that the seller might like to stay on in the home until the end of a school term, or until a specific relocation date, and it might be to your advantage to accommodate those wishes.
"In addition, you should always double check what fixtures and fittings are included in the sale, or not. Ceiling fans, custom made curtains and bookcases, gas stoves and fireplaces, striking light fittings, wall-mounted mirrors and Smart home devices may be among the things you like most about a home you are thinking of buying, so don't take it for granted that they will still be there when you move in. Make sure they are specifically noted in your offer to purchase and sale agreement."
- The history of the property. It's not only interesting to find out when the home was built, but also whether it has been altered or added to since then, says Kotzé. "The property professional marketing the property should be able to show you at least the newest approved building plan for the property, as well as the title deed. These documents will enable you to determine whether all parts of the home, including garages and outbuildings, are 'legal'. In addition, you will be able to see if there are any title restrictions that could affect how you are able to use the property."
You should also ask if the current owner has experienced any problems in the past and what steps were taken to rectify them? Even if all current defects have been disclosed in writing, it's important to know if the roof once leaked, for example, how it was repaired and whether you can expect any other sections to develop leaks due to the way it was originally constructed. "Similarly, it is good to know history of any previous problems with rising damp, the foundations, the plumbing and the electrical system, even if these are not currently manifest."
- Calculation of the asking price. Prospective buyers are quite entitled to ask how the sellers arrived at the asking price for their home, he notes. "Hopefully, they will have made use of a comparative market analysis (CMA) detailing the asking and selling prices of similar properties recently sold in the area, as well as the length of time they were on the market. And if that is the case, their property professional should be more than happy to provide you with a CMA for the area, too - and willing to discuss in what ways the home differs from others recently sold.
"This is the best way to establish whether the asking price is fair - and how far you may be able to depart from it in your offer to purchase, taking into account all you have heard about the reason for the sale, the history of the property and the terms of the contract."
Author: RealNet
