Buying privately can save you some money on the purchase price, but is it worth taking the risk? I will try to explain both the advantages and disadvantages of using estate agents, and also what you should keep in mind or be aware of.
Advantages Of Buying Through An Estate Agent
- Estate agents usually have several properties to show you once they know what you are looking for (price range, property size, etc.).
- One phone call can arrange a couple of places to see, and often estate agents also have keys to the properties so you can view them during office hours. Many private sales can only be viewed after office hours or when it suits the owner.
- Estate agents can provide valuable advice, service and assistance and have all the required legal documents ready to make an offer.
- A good agent should be able to show you similar properties in the same area which were recently sold, and tell you what their prices were to compare with the ones you are interested in.
- They will negotiate with property owner on your behalf so you don’t have to, and in some cases even lower their own commission so the seller will accept the offer easier.
Disadvantages Of Using An Estate Agents
- They will negotiate with property owner on your behalf (again?) … keep in mind the seller is paying the commission, so estate agents tend to be at least a little biased. Lower prices = less commission for them.
- Agencies usually charge a percentage of the sales price (up to 7%) from the seller, so if you were to buy the same property privately, you could save a couple thousand rands.
What To Keep In Mind
- You may not view properties with an estate agent, and then try to negotiate directly with the seller. If an estate agent introduced you to the property, they will be entitled to their commission.
- Some agents tend to push you over your “affordability” threshold (to get a bigger sale and more commission), but this often results in declined home loan applications, sales falling through and time wasted waiting for an outcome. You might have to start the house hunt from scratch again.
- Once you found a property by using an estate agent, tell them straight away you are dealing with your own originator. They will most likely try to refer the business to their personal friends/contact for a kickback, but you have the right to choose.
- If you decide to buy privately, seriously consider making use of a home inspection since with private sales you might not always not protected by the Consumer Protection Act in case there are problems with the property.
Happy house hunting!