For most people, buying a home is the largest investment they’ll ever make and it’s natural to want to ensure you’re getting a good price for your property when it’s time to sell, however, determining whether an offer is fair can be challenging.
“We all want the best possible return on investment,” says Cobus Odendaal, CEO of Lew Geffen Sothebys International Realty in Johannesburg and Randburg, “but whilst it’s tempting to hold out for a better offer, it is crucial to not lose out on a good deal and to balance expectations with market realities and also individual circumstances.
“Determining whether you are getting a good price for your home requires careful consideration of various factors and, of course, the knowledgeable advice of your estate agent.
“This is one of the main reasons that it’s essential to select an agent who has experience and knowledge of the local market so make sure you ask questions about how long he/she has been working in your area and ask for a sales track record.”
Over and above consulting with your property professional, Odendaal says that the following should be taken into consideration when deliberating about whether to accept or reject an offer:
Research the Market
To gauge the value of your home, start by researching the local real estate market. Look at recent sales of comparable properties in your area to get an idea of the average selling price. Consider factors such as location, size, condition, and amenities to make accurate comparisons. This information will serve as a benchmark when evaluating offers.
Evaluate Buyer Motivation
Consider the motivation of the buyer when assessing an offer. If a buyer is genuinely interested in your property and has made a competitive offer, it may indicate that they are willing to pay a fair price.
Conversely, if an offer seems low or comes with multiple contingencies, it may indicate a less serious buyer or someone looking for a bargain. Assessing the buyer’s motivation can help you gauge the likelihood of receiving better offers in the future.
Factor in Market Conditions
Take into account the current market conditions when evaluating an offer. In a seller’s market with high demand and low inventory, you may have more negotiating power and the potential for multiple offers and holding out for a better offer could be a viable option.
In a buyer’s market with increased supply and slower sales, it may be more challenging to secure higher offers quickly. Understanding the broader market conditions can inform your decision-making process.
Consider Time on the Market
The length of time your property has been on the market can influence your decision to hold out for a better offer.
If your home has been listed for a considerable period without receiving significant interest or offers, it may be a sign that the initial asking price was too high. In such cases, you may need to re-evaluate your expectations and consider accepting a reasonable offer to avoid further delays and potential price reductions.
Analyse the Terms and Conditions
Assess not only the price offered but also the terms and conditions outlined in the offer. Look beyond the Rand amount and consider factors such as financing contingencies, inspection contingencies and proposed closing timelines.
An offer with simple or favourable terms may compensate for a slightly lower price.
Evaluate Buyer Financial Strength
For instance, a cash offer or a buyer with a strong pre-approval from a reputable lender can provide more confidence in their ability to close the deal.
Offers from financially secure buyers may be more favourable, potentially warranting greater consideration even if the offer price is slightly lower.
“While it’s important to consider these factors, trust your instincts and negotiate when you believe it is in your best interest,” concludes Odendaal.
“With a thorough assessment and strategic decision-making, you can ensure you are making an informed choice and potentially secure a better offer for your home – or not lose out on what’s already a good deal.”