Unexpected offers on lower-priced properties have become more popular as supply in some areas becomes restricted
As more people look to buy property in the Western Cape, homeowners could find themselves being asked to sell their properties, even though they are not on the market.
In areas where demand outweighs supply available to buyers, Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, says this practice is not unheard of.
“There are areas such as the Western Cape that continue to see an influx of buyers looking for property. However, the inventory of homes currently on the market does not meet the demand and often buyers have a specific idea of the home they want. If they don’t find what they are looking for among what is available, we could see more buyers trying to purchase homes that are not on the market.”
While this is predominately seen in the upper-end of the market, unexpected offers on lower-priced properties have become more popular as supply in some areas becomes restricted. Even though it may seem like a simple matter of saying no, Goslett says such offers are usually higher than the current market value of the property, so they may be worth considering.
However, homeowners should first seek professional advice, either from an attorney with real estate experience, or a reputable estate agent. This will provide them with guidance regarding the correct procedures and processes to follow.
It is also important to get a comparative market analysis, including current trends and values in the area, he says.
“An estate agent can be helpful here as they will be able to provide sales figures and a comparative market analysis of the area. This will provide an estimate of what the home is worth in the current market and give you an indication of how fair and attractive the offer is.”
Homeowners faced with this situation should also consider the financial implications of a potential sale and whether it could benefit them. Goslett says they should look into aspects such as whether the offer would cover the existing bond and leave enough over for other expenses.
“There might be early cancellation fees on the bond or capital gains tax to consider. Other aspects would include looking at the affordability of buying another property and new bond repayments on, perhaps, a higher amount. The renegotiation of any contracts where the current property serves as a surety will also have to be considered.”
If the interested buyer has made an offer subject to certain conditions, these also need to be met before the deal can be done. The buyer’s intention for the property will usually provide the homeowner with an indication of what conditions will need to be met. For example, if the buyer wants to use the residence for business purposes, the offer will more than likely be subject to the application for business rights being granted.
“Knowing the conditions the offer is subject to will also provide you with an estimated timeframe as to how long you have to make your decision.”
But this is not all, as life-stage and future plans need to be considered, Goslett advises.
“If you are living in a starter home and want to start a family, an offer to purchase your current home might give you the opportunity to buy a property that better suits your developing needs. If you already have a family settled in a house that meets your needs and enjoy the area in which you live, the decision may be a lot harder to make.
“If you receive an unexpected offer, the decision to sell or not is yours. Only you can decide whether or not the offer is worth your consideration. The decision needs to be the right one for you and should fall in line with your future aspirations.”