The Right Price for Your Home Purchase
2020/03/02

"Ever wondered about how to establish the price you’re willing to pay for a home? "

You may not have. You need to purchase a home, in the back of your mind you have the amount you can spend and you know the area you want to look in. So, you jump in your car and view houses, only to be very disappointed in the outcome.

Let’s look at a technique that could take the sting out of the situation. Your first port of call should be to contact your estate agent. They have all the facts and figures and can introduce you to established financial institutions, bond originators and contractors such as builders, electricians etc. They will take you through the whole process of market availability in various areas, deposits, transfer duty, legal fees, the transaction period and any other contingencies you may encounter.

With a good idea of what expenses you are in for, it is a case of checking your budget. Perhaps it can be a cash sale. You may need to sell your current property or you might be able to afford an additional loan without having to sell your present home first. With your financial situation simplified, it is always an excellent idea to be pre-qualified. This gives you a head start with regards to price range. Remember, when purchasing a home you must have a definite figure which you are willing and able to pay for the home of your choice. This will also include a budget for any alterations.

You may find the asking price for a property is not as negotiable as you originally thought. At this point, you will have to bring yourself back to reality and reassess the situation. Is the amount being asked relative to the neighbourhood and to the market cycle at that given period? What alterations are required and what are the costs? Compare it to other homes for sale in the area - could they be bought cheaper to allow you to spend more on making the home suit your lifestyle?

This assessment should bring you to the point of making an offer. The offer should fairly reflect current and expected market conditions and should be reasonable. You do not want to open the door to negotiation and you do not want to insult the seller (who was advised on the price at which he has listed his home). A seller can only expect that negotiations will take place if he has insisted on listing his home at a higher than average price. Walk away if the seller is unreasonable.

Your offer to purchase is an important document. It states exactly how you are going to pay for the house. A large deposit with no 'subject to' clauses can positively impact the acceptance of a lower offer.

The usual deposit requirement is between 10% and 30% of the sale price. Thereafter, the balance of the funds may come from a savings account, a bond and/or the sale of another property.

The offer may include requests for an inspection of the house or certain land reports. A feasible period for all this to be accomplished must be stated in the offer for consideration by the seller.

On receipt of the offer, the seller may respond with a counter-offer. It is then up to you to assess the situation, based on the advice you receive from your real estate agent. If the counter-offer is reasonable and is still within your range, you should have no problem agreeing to the terms.

Once both you and the seller have finalised the terms of the offer, your attorneys will ensure that all requests are followed through in the specified periods of time and that guarantees are issued by financial institutions.

There you are – it’s a very simple procedure that takes the emotion out of the deal and allows you to work within your financial framework and establish the “right price” for your next property.

12 Quick tips on selling your home Are you ready to place your home on the market? Do you understand the process and details of selling a home? Be as informed as possible so you can make the absolute best business decision. After all, the sale of your home is a business decision! Here are some simple and inexpensive ways to assist you to get the best price possible:

1 - Determine the fair market value for your house. Buyers are looking for a home that is correctly priced. Overpricing your home means that it will not sell right away and eventually, questions will be asked as to why it is not selling and it becomes unappealing.

2 – First impressions are created at the front of the house. See that the front of your home is as near perfect as possible. Start with the outside. Are the lawns in good shape and the garden landscaped and pretty? Present its best features and remove distractions. Tidy, clean, uniform and pretty should be your guidelines. The buyers initial reaction will determine whether they buy or walk away from your home.

3 - Remove personal items. Remove pictures and personal items of sentimental value. Potential buyers want to see the structure of the home and you don’t want them to be distracted by your memories.

4 – Declutter. Every home has clutter but do your best to remove yours before putting your house on the market. Remove anything that is not needed by prepacking and placing in storage. This gives buyers a better opportunity to place their own furniture in their minds.

5 – Neutral Colours. You might think this is bland but people shy away from striking colours on walls and doors. Give your home a paint using neutral colours. Most buyers do not want to paint the minute they move in and will be happy to place their belongings in rooms that do not make striking statements.

6 - Kitchens and bathrooms – should be spotless. Special attention is always paid to these two rooms. They should be clean and well lit. If you have any gadgets that you will be leaving behind, make sure the potential buyers are aware that they are in working order. Buyers are usually keen on these items and it may detract them from rooms that will need revamping in the not too distant future.

7 - Never apologise for your home. Your home is what it is. Be proud of it. Apologising gives rise to questions. If there are any problems offer solutions but never apologise.

8 - Work with your agent, not against them. Help your real estate agent to sell your home. Give them the information they need and step back. All viewings should be arranged through and presented by the agent. They have the experience otherwise you would not have involved them. Trying to sell your home behind their backs has legal implications which you do not want to get involved in.

9 – View by appointment only. Serious buyers will have been screened by your agent. This means your house is not on view to everyone but only to those pre-qualified by your agent. Should a buyer arrive without an appointment, you are quite entitled to give them your agent's card and ask them to view the house with the agent.

10 - Sell before you need to. There is no definite time frame to sell your home. Circumstances change but it is always preferable to put your house up for sale before you plan to move. This gives you a leeway of about three to six months before your home is sold. On receipt of a serious offer you can begin your search for a new home. This eliminates trying to sell your home in a hurry and perhaps not acquiring the price you wanted for your home.

11 - Advertise. Your estate agent will present you with a marketing/advertising plan which you should view before you sign a contract. Make sure that your home is advertised in the areas that will attract buyers. A well priced home will not sell if it is not advertised correctly.

12 - Remove emotion from the sale. No matter how many fond memories you have of your home, remember the buyer is not interested in any of them nor the reason for the sale. They will only be interested in the property they are buying, making mention of any problems they may see and finally coming to a satisfactory conclusion. Make sure that when you look at offers you do so rationally and do not let your emotions rule your decision to sell.

Make sure that the moment you put your house on the market is the moment you kiss goodbye to your home. This will make the sale so much easier. After all, a house is a material object and times change.

You will always have with you the wonderful memories of your stay in that home.

RTS