This may surprise those who see estate agents as grasping and avaricious, but all intern and new agents at the Rawson Property Group who attend the initial ten day proficiency course are taught to get the potential purchaser to ask himself whether at this stage in his life it might not be better to hold back and wait — and this advice applies equally to sellers.
This tip forms part of comprehensive advice package that Wayne Albutt, Regional Sales Manager for the Rawson Property Group in the Western Cape, gives to those purchasers who consult him.
“There may well be occasions in the purchaser’s life,” says Albutt, “when his future is by no means clear. To add to his risk by encouraging him to make the commitment of a home purchase is wholly irresponsible. For example, he may be in line for a work transfer or, alternatively, he may be facing an outright dismissal or a restructuring in his company which will make him redundant. Again, if the business in which he works is going through hard times, he should wait until it has recovered before committing himself elsewhere. Being in a new and exciting personal relationship is often a catalyst to wanting to make a real estate commitment, but once again it is also advisable to hold off until a level of stability is achieved.”
Then, too, says Albutt, there are potential purchasers who are strongly motivated by a resentment of landlords. This is based on the belief that in paying rent they are helping such landlords to pay off their own bonds. Obviously there is truth in this, but then the same truth applies to virtually any business with which a member of the public deals. In many cases this perception leads to a decision to buy and not rent, even though this might not be right for them at that time.
“People following this line of thought,” says Albutt, “tend also to forget that in the first ten years of owning a bonded property one is merely paying off interest and not really acquiring any capital. Often they are not aware that ownership involves a host of other extra costs including municipal services and property maintenance for which they have not provided.”
If, however, the purchaser is in a position where he can comfortably go ahead – and is rightly motivated by the desire to give his family more stability and security whilst increasing his asset base, then, says Albutt, the best advice he can give is to save, save and save.
“The goal,” says Albutt, “should always be to have more than the sum thought to be necessary. The savings should be sufficient to cover the deposit (very few financial institutions are these days eager to give 100% mortgages), the transfer duty and other associated transfer costs as well as the moving contractor’s charges and ancillary costs. Then, too, there should be money for repairs to the purchased property because almost every second hand property has inherent defects and a budget for personalised changes as well as extra furniture and equipment (for example, lamps, curtains, lawnmowers and garden tools) which the family may find necessary to make their new home suitable. When an estate agent is in a good relationship with a purchaser, he will be able to advise him on saving, often six months or a year or more before the purchaser actually embarks on serious house hunting.”
Another piece of advice that buyers should take to heart, says Albutt, is to liaise with as many estate agents as possible serving the area in which they plan to buy.
“Get from them all the information you can. Information of this kind is the best source of empowerment to help you make the right decision.”
“If you rely only on one or two agents you may be misinformed – with serious consequences,” says Albutt. “It has to be remembered that while not all agents are area experts, the purchaser simply cannot operate properly without accurate market-related facts at his fingertips.”
When the purchaser has done the necessary homework and has ascertained just what he can afford, and the right property then crops up, the best advice he can give the him, says Albutt, is to make his best offer immediately.
“In today’s market, which is heavily slanted in the seller’s favour, it is self-defeating to put in a low offer in the hope that through subsequent negotiations the seller will meet you halfway and you will get a relative bargain. That type of thinking will lead to disappointment these days because, if the property is correctly priced, the seller will almost certainly get another better offer which he will accept.”
“Similarly if you make your offer subject to additional bargaining conditions, your offer will seem weaker and you will give the agent very little room in which to negotiate. Suspensive conditions such as the selling of your current home at an unrealistic price or subject to a 100% mortgage may well cause an educated seller to accept a competitive offer from another purchaser with less hurdles.”
“Summing up, my advice to those buying in today’s market is: make sure you are ready to purchase, consider honestly your personal situation and ask yourself how secure it is. Be in a position to make an attractive, clean offer to purchase, save as much as possible and make your first offer your truly best offer.”
For further information contact Wayne Albutt on (021) 658 7100.
