When you want to sell a property, there are some good reasons to entrust the process to an estate agent. Property law is complicated, and so is understanding the conditions of the market to set the right price. An estate agent can advise you on a fair price, based on current market conditions, and take care of the legal and financial processes involved in a property sale.

They’ll also advise you on any quick renovations or upgrades you could make to increase your chances of a quick sale. South African property professionals are subject to strict regulations and industry standards, so their expertise can give you peace of mind during a complicated process.

However, there is nothing to stop you selling your home or investment property privately without the help of an estate agent, if you choose to. Just make sure you’re up to the challenge. This blog contains some tips on pitfalls to avoid, and the process you must go through.

Why choose private property sales?

Most people who opt for a private sale do so to avoid paying an estate agent’s commission, which is usually between 5% and 7.5% of the selling price. Avoiding commission can increase the final amount you get from the sale by a tidy sum, especially on high-value properties.

As a private seller, you’ll also have immediate control over where you advertise the property, the selling price you ask, the offers you’ll consider, and the hours in which prospective buyers can view the property – which is important if you’re still living in it. You can show buyers round the property yourself, pointing out the most attractive features, and you can also give interested buyers more details about the neighbourhood and the nearby amenities.

Potential disadvantages of selling your home privately

Selling privately means allocating much of your time to managing the process. You’ll need to value your property accurately, market it and handle administrative tasks during the sale. Researching market trends and legal requirements can also take a lot of time.

Promoting your property effectively through online listings, signage or other channels may rack up advertising costs – if you’d engaged an estate agent, this would’ve been their responsibility. You’ll also need to understand the property market and have the right negotiation skills to secure your asking price.

When an interested buyer makes a written offer, they make a legally binding commitment. If you accept that offer or make a counteroffer, you have also entered a legally binding contract. As a private seller, you need to understand the legal implications and potential consequences of this process. An estate agent will have the professional training to spot any legal issues in an offer, and make sure that your acceptance or counteroffer is also legally valid.

Cracking the code of property value

Various factors will influence your property’s value. Is it close to schools? Where are the nearest shopping centres? Is it in a sought-after area? Are any new developments planned in the neighbourhood, and if so, what type? How well maintained are the neighbourhood roads, parks and streetlights? Are the other homes on the street or in the apartment block in a well-kept condition?

All these questions, among others, can affect the value of your home. If most of the answers are positive, they could increase your asking price. You can also research properties for sale in your neighbourhood that are similar to your home as a guide on your asking price.

Effective price negotiation strategies

How you present your home to potential buyers is crucial to your ability to negotiate the price you want. Improving minor details can increase the value of a property significantly. Hire a contractor to touch up paint, check light fittings, and fix loose cupboard doors – these are affordable, quick fixes that don’t require renovation but can make your home look fresh and inviting.

Consider the overall look of the home. Declutter any untidy spaces, and place furniture in a way that looks pleasing, but allows easy movement through the rooms and shows off the functionality of each space. If you can afford to, replace worn-out items like rugs, throws, cushions and lampstands. Clean carpets, blinds and air conditioning units, and repair any water leaks or broken accessories. Make your property stand out from other homes like it in your neighbourhood.

You’re legally required to inform potential buyers of any significant need for renovation, or any plumbing, electrical, gas-supply or structural problems that they would need to repair. In terms of the Property Practitioners Act, sellers must disclose all defects in a property. If you know of a defect and you don’t disclose it to the buyer, you could face financial and legal penalties.

Crafting a solid property sale agreement

• An offer to purchase (OTP) is a binding legal agreement between a buyer and seller for the property. The buyer should inspect the property, include negotiated conditions, review OTP terms, and comply with the agreement to avoid default.
  
  
• The Alienation of Land Act protects natural persons buying residential property for less than R250,000. A 5-day cooling-off period allows buyers to revoke the sale agreement within 5 business days. Afterwards, penalties may apply for retracting an agreement to purchase. If you make an offer on a property for more than R250,000 and the seller accepts it, there is no cooling-off period. The deal becomes binding until the property is transferred or the deal is terminated.
  
  
• The Consumer Protection Act doesn’t apply to private sales by non-business sellers. It protects buyers from business sellers and doesn’t cover juristic persons with assets or turnover exceeding R2 million. The voetstoots clause applies in such cases – meaning that you buy the property as it is.

Marketing your property

Put together a virtual video tour of your property to show off its features. Have professional pictures taken to showcase it on various property sales portals. Use your social media network to market your property, and consider paid ads targeted at potential buyers within your neighbourhood.

You know your home best, so highlight the benefits of living in it from a potential buyer’s perspective in your ads. If you host an ‘on show’ day, clean up before the showing and lock up all your valuables. Plan your open house like an event and give each potential buyer a thorough tour of your home. Give them a sense of what it might feel like to live there. If you can, get friends or family to take care of pets, guests or young children on the day, so there is nothing on your property to distract buyers from the home itself.

How Nedbank can help homeowners

We always advise clients to seek help from a qualified professional when dealing with important but unfamiliar legal and financial processes. We firmly believe that the expertise an experienced estate agent will bring to property transactions is well worth the cost of their commission.

However, we also believe that our clients should be free to choose their preferred options. If you want to sell your property privately, we urge you to seek legal advice when you get to the stage of considering an offer, and during the property transfer process.

From a finance perspective, Nedbank will always be available for financial planning guidance and affordable home loan options.