Selling your property can be an expensive affair if not done correctly.
Selling of property can be an expensive affair for several reasons:
- Selling at undervalued price – you have no idea that your property is worth more than the price you sell.
- Not able to sell your property in short time – waste of time is equivalent to waste of money because you lose the potential interest or the capital that can be used for other income generating activities.
- Hired expensive agent or the wrong agent – you hired an agent who cannot sell your property in a short time, negotiate in your favour or cost you a big hole in your pocket.
- Entered into an agreement that is not favourable to you or significantly different from your terms and conditions, especially the selling price.
- Get cheated – property transferred and you don’t get your money.
- Getting the wrong property transferred – you intend to sell Property A but your more valuable Property B is transferred instead.
- You breached the agreement unintentionally – and this caused you to pay the other party for breaching the agreement.
There are many reasons how selling your property or house can be an expensive affair. But, we give you here 7 tips to ensure a smooth selling of your property and to ensure that selling of your property does not turn into an expensive affair, or at least minimize any risks or losses.
1. Determine Your Selling Price
It’s often difficult for seller to set a correct and acceptable selling price. One is too tempted to set a price too high for buyer to purchase. The truth is, the value of the property is not what the owner thinks it worth, but it is the opinion of the purchaser.
If you begin with setting your price to high, you may not attract any purchaser. As time passes by, your property may join the expired listing and as a result, you’re frustrated and you lower down your price even more in order to quickly sell off your property. It could result in setting a price much lower than the acceptable market price because of your state of emotion at the moment of time.
Setting a selling price is not an art or science, but it’s one’s judgment towards the worth of the property by taking into consideration the locations, the surroundings, the neighbourhoods, potential developments in the future etc. It’s prudent for any seller who has no knowledge of the market price to do a research of the value of the property before setting the price.
You could do this either by asking your neighbours who had recently sell/purchase their properties next to you. Or you could hire a competent real estate agent who can advise you on the proper selling price. You could also hire a Certified Property Valuer to determine the market value of your property. Their reports will assist you in determining your selling price.
Your price may reflect the fees and costs involved like legal fees, stamp duties, tax and agent fees.
2. Ensure Your House Is Free From Legal Encumbrances
Do you have a clean title of your house? In other words, is your property charged to a bank, or been mortgaged to someone else? Is your property being caveated by some other person? Normally this happens if you purchase your property with a loan, or you borrowed money from someone else and use your house as a security.
Is your house currently tenanted? Some purchaser may want to purchase a property that is vacant.
You could hire a lawyer to help you ensure that your property is free from encumbrance before selling your property. Sometimes, a lawyer is needed to remove this encumbrance like where a third party has caveated your property for reason unknown to you.
3. Clear Your House
Before you let potential purchasers view your house, it is wise to ensure your house is “presentable”. Purchasers often choose a house which they feel comfortable and good when they walk into it. So, it’s wise to do some house cleaning, rearrange your furniture especially in your bedrooms and kitchen. Do some repairs and if necessary, paint the walls. Get your friends or relatives to view the house and get feedbacks from them.
If your house can make the purchasers feel comfortable, it is possible for you to sell your house at a higher price.
4. Find A Competent Property Agent To Sell Your House
If you don’t have the skills of negotiation and selling of your property or you don’t have the time, it is prudent for you to engage a property agent to help you in marketing the sale of your property. Selling a property is more than just hanging a “Sale Notice” in front of your gate, advertising on newspapers or internet. It involves a lot of process like answering phone calls from buyers, bringing the buyers to view the house and negotiation with the buyers.
A property agent will assist you in all the process up to the sale of your property. Here are some tips of hiring a good property agent.
√ Always ask their experience and credentials
√ Find out how they are going to market your property
√ Ask them about their fees and charges
√ Will they let you review documents prior to signing
√ What are their normal List Price-Sales Price Ratio
5. Meet the Purchaser or Know The Identity of The Purchaser
Although you could put your mind at rest if you have a competent property agent who will sell your property and filter the purchasers for you before completing the transaction, it is always wise for you to meet the purchaser or at least know some background about the purchaser.
You wouldn’t want to sell to a nasty or demanding purchaser as this type of purchaser normally demands a lot for their own interests or prolong your sale transaction to make life difficult for you. Also, ensure that the purchaser has the ability to pay for the purchase because his inability may prolong the transaction and in long run, incur costs and losses.
Some purchasers may go the extent of playing tricks in the transaction and as a result your property is transferred to him with the remaining purchase sum unpaid. This is where the next tip is very important.
6. Hire Your Own Lawyer
In Sarawak you can have one lawyer overseeing and managing the transaction for both purchasers and sellers and this significantly reduce the period of transaction and is less hassle. But, unless and until you are familiar with the lawyer or you trust the lawyer, it is always wise for you to engage your own lawyer.
A lawyer hired by you will ensure your interests are protected all the time. Your lawyer will ensure the transaction runs smoothly, the agreement is favourable and fair to both parties, and ensure prompt payments by the other party.
Your own lawyer can advise you on the legal problems that may arise in the transaction. For example, when there is a building condition attached to your title which you have not fulfilled, a lawyer can assist you to overcome the problem and ensure the transaction continues smoothly.
Before you hire a lawyer, ask them on their estimated legal fees. Property transaction can be costly because it involves a lot of payments to various bodies. You can read “The Hidden Costs of Property Investments” to understand better the costs involved.
7. Always Read the Fine Prints and Check The Details Before Sign
If you decide not to hire your own lawyer, or you do hire your own lawyer, always read the fine prints of any agreements or letters before you sign. Check the particulars and ensure its correctness. Particulars like names, address of the property, selling price, methods of payments, duration of transaction, default terms and costs are all important details that you need to go through.
You may intend to sell Property A, but if you sign the documents stating Property B of yours, you transferred the wrong property out to somebody else. So, be careful when signing any documents.
Ask your lawyer if there are sentences or terms in the agreement that you don’t understand.
To make things simple for you, always hire a lawyer and the lawyer will advise you and ensure that the sale of the property is not an expensive affair.