Tips for first-time property sellers when considering offers
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The latest bank data shows a shift to higher value loans being granted. Samuel Seeff, chairman of the Seeff Property Group says it is indeed the case that sellers are taking advantage of the interest rate savings.
Many are first-time sellers looking to move up in terms of a better or bigger house or neighbourhood while the mortgage lending conditions are favourable. He says further that while it is easy enough to buy your first house, selling it is quite different. He offers advice on how to accept the right offer.
Choose a good agent and know the market. As a first step, appoint an experienced local agent on a Sole Mandate so that you only deal with one agent who can provide the best advice for the current market. This should include information on recent sales prices of comparable properties.
How low should you go? If the offer is within an acceptable range of 5% to 10% below the asking price with minimal conditions, consider it seriously. There is no guarantee of a higher offer. The first offer is often the best as it reflects how the market views the property in relation to the asking price.
What if there is more than one offer? The highest price is usually the one you want to go for, but beware the conditions attached. If the purchaser needs to first sell a property, there is the risk that they may not succeed. The agent should advise on the best option to accept.
A cash offer with no conditions is always first prize. Your agent will verify the validity of the offer and unless the price is out of step with current prices paid for similar properties, a “clean” offer (cash with no conditions) could mean a smooth transaction with minimal delays.
A conditional offer should include a “72-hour clause”. This enables the seller to continue marketing the property until the conditions are fulfilled. Should a more favourable and unconditional offer be forthcoming, the buyer is then given 72-hours to fulfil the conditions, waive and proceed without conditions, or walk away from the deal. The seller can then accept the better offer.
What if I get a direct offer from a buyer or another agent? You must follow the conditions of the mandate and cannot accept offers which are not provided via your appointed agent as you risk being liable for a double commission claim. You need to refer the buyer or agent to your appointed agent.
How to deal with a counteroffer? Not all offers are accepted outright. There is often a period of negotiation and counter offers. The seller can propose a counteroffer. Typically, this means the seller has accepted the buyer's offer subject to one or more changes, usually a higher price, bigger cash deposit or removal of certain contingencies. The buyer can reject this or counter the seller’s counteroffer.