Sellers face several dangers

The current economic climate has sellers in a bind and facing several dangers which could be exploited by unscrupulous buyers.

These risks, says Ivan Neethling, Chairman of the Western Cape Institute of Estate Agents, have led to some sellers being pressured to accept prices that are not market related, i.e. well below the 15% to 20% discounted rates now prevailing.

This, he added, is particularly likely in the lower price brackets when owners are retrenched – and where there is often a dire shortage of funds to tide them over the intermediate period. They can be desperate to avoid having their homes repossessed by banks.

"The shark buyer is always quick to spot financial weakness and fear of the future. Evidence of these will be worked on to secure a quick, highly advantageous buy."

Another "trick" used by bargain hunting buyers, said Neethling, is to persuade the seller to give up his right to appoint the conveyancer.

"The 'bait' will usually be that the buyer has a friend or relation who is willing to cut the conveyancing fees. However, if the conveyancer is not appointed by the seller it is all too easy to delay transfer, a situation which will work to the buyer's advantage," said Neethling.

"The seller should, therefore, always hold onto his legal right to appoint the conveyancer."

A further danger facing sellers is that of being talked into granting early occupation of their premises because the buyer is paying in cash.

"In these circumstances, it is absolutely essential that the source and legality of the cash be verified before occupation is given – it is important to seek out the advice of a property professional or an attorney on this matter."

Should it be discovered that the money is either "hot" or simply not there, it could result in a costly and time consuming process to evict the occupant. There could also be problems under the FICA legislation, said Neethling.

"Since the introduction of the PIE Act and new amendments to the tenancy laws to curb tough landlord action, the law works very much to the advantage of the occupant or tenant," said Neethling.

"In general, whenever an offer seems almost too good to be true (as is often the case with early occupancy and instant cash buys) one should see warning signals."

Readers' Comments
Have a comment about this article? Email us now..

Property News
Click here for more property news articles.

Need a blog?
Start your own blog with a free blog from 24.com.