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How to navigate a spontaneous offer on your home

26 Feb 2018

While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home?

“In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home.

He says there are areas in the country, such as the Western Cape, that continue to see an influx of buyers looking for property.

“However, the inventory of homes that are currently on the market do not meet the demand and often buyers have a specific idea of the home they want. If they don’t find what they are looking for among what is available, we could see more buyers attempting to purchase homes that are not on the market,” says Goslett.

“While predominately seen in the upper end of the market, unexpected offers on lower-priced properties have become more popular as supply in some areas becomes restricted.”

If you have not considered selling your home and you receive an unexpected offer, it may seem like a simple matter of saying no. However, given the nature of this kind of offer, it is more than likely going to be a price that may exceed the current market value, and could be worthwhile considering.

Goslett notes that should you find yourself in this situation you should consider a few elements before making their decision:

1. Seek professional advice

If you have not considered selling your home and you receive an unexpected offer, it may seem like a simple matter of saying no.

If you receive an unexpected offer to purchase it is best to consult with either an attorney with real estate experience or a reputable real estate agent working within the area. Consulting with a professional will provide you with guidance regarding the correct procedure and process to follow.

2. Get a comparative market analysis

Another reason to consult with a real estate agent is that it is important to obtain information and analyse current trends and values in your particular area. An estate agent can be helpful in this regard as they will be able to provide sales figures and a comparative market analysis of the area.

This will provide an estimate of what the home is worth in the current market and give you an indication of how fair and attractive the offer is.

3. What are the financial implications?

Perhaps it would be a good time to review your financial situation to give you a clear indication of the feasibility of the deal benefitting you. Look into aspects such as will the offer cover the existing bond and will there be enough for other expenses. There might be early cancellation fees on the bond or Capital Gains Tax to consider.

Other aspects would include looking at the affordability of buying another property and new bond repayments on perhaps a higher amount. The renegotiation of any contracts where the current property serves as a surety will also have to be considered.

4. Is the offer made subject to any conditions?

If the buyer has made the offer subject to any certain conditions, these conditions will obviously have to be met before the deal can proceed to conclusion.

If the buyer has made the offer subject to any certain conditions, these conditions will obviously have to be met before the deal can proceed to conclusion. The buyer’s intention for the property will provide you with an indication of what conditions will need to be met.

For example, if the buyer intends to use the residence for business purposes, the offer will more than likely be subject to the application for business rights being granted. Knowing the conditions the offer is subject to will also provide you with an estimated timeframe as to how long you have to make your decision.

5. What are your future plans?

Your life stage and future plans will need to be considered. If you are living in a starter home and want to start a family, an offer to purchase on your current home might give you the opportunity to buy a property that better suits your developing needs.

If you already have a family that is settled in a house that meets your needs and enjoy the area in which you live, the decision may be a lot harder to make.

Finally

“If you receive an unexpected offer, the decision to sell or not is entirely yours. Only you can ultimately decide whether the offer is worth your consideration or not. The decision needs to be the right one for you and should fall in line with your future aspirations,” says Goslett.

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