Many dangers lie in wait for the hasty homeseller warns Institute Chairman

With the latest drop in the interest rates, the appetite amongst buyers for residential property has shown a marked increase – and many buyers are only too aware that as a result of what has happened in the property sector over the last 18 months, there are sellers “out there” who are “vulnerable” as they are desperate to sell fast.

This scenario, says Ivan Neethling, Chairman of the Western Cape Institute of Estate Agents, has led to some sellers being pressured to accept prices that are not market related, i.e. well below the 15 to 20% discounted rates now prevailing.

“We have to warn sellers in a tight spot,” said Neethling, “that they can be exploited by unscrupulous bargain hunters.”

This, he added, is particularly likely in the lower price brackets when owners are retrenched – and where there is often a dire shortage of funds to tide them over the intermediate period. They can be desperate to avoid having their homes repossessed by banks.

“The shark buyer,” said Neethling, “is always quick to spot financial weakness and fear of the future. Evidence of these will be worked on to secure a quick, highly advantageous buy.”

Another “trick” used by bargain hunting buyers, said Neethling, is to persuade the seller to give up his right to appoint the conveyancer.

“The ‘bait’ will usually be that the buyer has a friend or relation who is willing to cut the conveyancing fees. However, if the conveyancer is not appointed by the seller it is all too easy to delay transfer, a situation which will work to the buyer’s advantage,” said Neethling. “The seller should, therefore, always hold onto his legal right to appoint the conveyancer.”

A further danger facing sellers according to Neethling, is that of being talked into granting early occupation of their premises because the buyer is paying in cash.

“In these circumstances,” said Neethling, “it is absolutely essential that the source and legality of the cash be verified before occupation is given – it is important to seek out the advice of a property professional or an attorney on this matter.”

Should it be discovered that the money is either “hot” or simply not there, it could result in a costly and time consuming process to evict the occupant. There could also be problems under the FICA legislation, said Neethling.

“Since the introduction of the PIE Act and new amendments to the tenancy laws to curb tough landlord action, the law works very much to the advantage of the occupant or tenant,” said Neethling. “In general, whenever an offer seems almost too good to be true (as is often the case with early occupancy and instant cash buys) one should see warning signals. It will always pay to consult those with in-depth experience before committing to the deal.”

Article by: http://ieasawcape.co.za