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Real Estate Basic Buying Process Guide
By arlene | September 13, 2008
Once you have decided on the property you want to buy, you should proceed by making the seller an offer in a document called the Offer to Purchase. This document is also called an Agreement of Sale or Purchase Agreement. It states the terms and conditions under which you agree to buy the property.
It is legally required that the agreement to purchase property should be in writing. You might have heard the saying that “a verbal offer is not worth the paper it’s written on”.
The Purchase Agreement (or Offer to Purchase).
The Offer to Purchase is normally a standard, printed document, supplied by the estate agent. The pre-printed Offer to Purchase form is quite easy to complete, and should contain at least the following information:
The Purchaser’s and Seller’s Identification
Both the purchaser and the seller should be properly identified to prevent any future misunderstanding, including full names as well as identification numbers.
Description of the property
The property must be defined properly — it should be identifiable from the description and wording in the agreement. The Offer to Purchase in Appendix A offers space for the street address, stand number and suburb of the property to be filled in.
Price
The agreement should include the price offered by the purchaser. Before you complete the Offer to Purchase document, you should decide whether the price of the property reflects fair market value.
By now you have most probably viewed a number of available properties and by talking to your agent, studying advertisements and visiting show houses you will have a good idea of the value of similar houses in your neighbourhood of choice.
You can also ask your agent for a Comparative Market Analysis (CMA). This analysis will compare the property you’re interested in to other properties of similar size, condition, location and amenities that have been sold recently or are currently in the market.
Although you may decide to offer less than the asking price, you shouldn’t offend the seller by making a ridiculously low offer.
This will also, however, depend on prevailing market conditions. When interest rates are low, there will probably be more buyers than properties available. In such a market, generally known as a seller’s market, lower offers are unlikely to be accepted (because there are so many buyers).
The other side of the coin is the so-called buyer’s market — when there are fewer buyers in the market to compete with. Generally, higher interest rates will result in a relative scarcity of buyers.
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Topics: Africa, Agent, Form, Market, Property, Sale |
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