While many people think they will make more money by avoiding paying an agent’s commission and handling the sale themselves, the opposite is usually true.
Apart from finding an appropriate buyer for the home, a real estate agent is also a seasoned negotiator who can make sure a seller does not leave any money on the table while negotiating the terms of the OTP.
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Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that in most cases, selling the property through an agent will bring about a higher profit, often enough to cover commission and more. Why is this? Well, for one thing, Goslett notes that the estate agent has the industry experience and networking resources to price the home appropriately and match it to an appropriate buyer.
But apart from that, agents negotiate and make deals for a living, so there is a good chance that an agent will get a better deal for the seller than the seller would themselves. “Considering that a home sale is probably one of the biggest deals that a person will make in the lives, wouldn’t you want the negotiating skills of a seasoned professional helping you along?”
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According Seeff agents (in an article published in in 2023, offers to purchase come in all shapes and sizes and knowing when to accept is not always an obvious choice for sellers. For example, the highest offer is not always the best offer as it may come with contingencies and conditions, and the best offer is not always the highest price offer.
Goslett says while it might be tempting to accept the offer with the highest monetary value, Goslett also cautions sellers to assess each of the offers based on its own merits. “At first glance, it would seem that the offer with the highest rand figure would be a natural choice. However, it is best to read through each of the offers carefully, paying specific attention to the suspensive conditions in each. You don’t want to lose out on a sure offer simply because you agreed to an OTP with riskier terms at a higher amount,” he explains.
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Elaborating on what these risky conditions might be, Goslett highlights the financing of the deal as one of the most important considerations, as this is often the top reason why a sale falls through.
When it comes to financing the home, Goslett explains that unless the buyers present a cash offer, sellers should ask whether the buyer has a deposit saved and whether the buyer is prequalified for home finance. “A deposit is an excellent indication that the buyer is in a financial position to purchase a home and are serious about the offer. Sellers should also check if the buyer has pre-approval for a home loan, as this is the most reliable way to prove that the buyer will be able to access the funds when it comes time to purchase the home,” he says.
“Working with a trusted real estate advisor can be so helpful when trying to work out the best offer on your property. Apart from their negotiating skills, a RE/MAX agent can also be a great sounding board for advice and can help sellers make informed choices when weighing up the pros and cons to each OTP they receive,” he says.
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According to Seeff, if a prospective purchaser offers to buy your house at the full asking price with minimal conditions attached, then it is almost a no-brainer that you would accept it. But it is seldom that straightforward. That said, in terms of assessing your asking price, research has shown that the first offer is often the best offer, but it might come with conditions.
Choosing an offer with the least potential of delays is always a better bet, but it depends on the circumstances.
So, when should you then accept the offer? Seeff’s agents offer tips:
- If it is a cash offer with no contingencies attached, but cash offers are typically not the highest. It may, however, mean that you can sell quickly and move on.
- If the offer is for the full asking price, or higher (which may sometimes be the case) and there are no challenging conditions or contingencies attached.
- If you need to sell in a hurry and the offer is not quite what you are looking for, then you could accept it in the interest of saving time and not risking that another offer may not be forthcoming.
- If finance is the only contingency and the buyer has been pre-approved for finance, then that provides a level of comfort that the deal will go through quite quickly.
- If the buyer is putting down a substantial deposit. That usually indicates that they are serious and are likely to secure the finance needed for the purchase.
- If there is work to be done on the house or it is a fixer-upper and the buyer is prepared to take it “as is” at an acceptable price, even if it is a bit lower than expected.
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