Some good reasons not to buy from a private seller
Category Buyer Advice
Penny-wise homebuyers who try to negotiate a private sale with a seller in the hope of knocking the price down may find to their regret they have been pound-foolish.
Many dangers lurk in private transactions, warns Berry Everitt, MD of the Chas Everitt International property group. “The biggest potential pitfall for buyers lies in the voetstoots clause – because an untrained eye may easily overlook hidden and latent defects which may require expensive repair at a later stage.
“Estate agents act on behalf of sellers in property transactions, since sellers pay the agents’ fee or commission. But agents are also bound by a code of conduct which affords buyers protection against one-sided contracts. Private buyers run the risk of not getting what they thought they were paying for because of loopholes in the sales agreement.
“If it is not nailed down in the contract, a buyer also has little recourse when the seller absconds with fittings such as blinds, carpets and even stoves – or when there is a gaping hole in the garden where the mature cycad once towered.”
Everitt says unwary buyers signing a private sale agreement may be in danger of losing their deposit if the sale is cancelled. “Such contracts may contain unrealistic requirements regarding, for instance, the period allowed to secure a loan or to effect transfer, which may place the deal – and the buyer’s deposit – in jeopardy.”
Duties that often devolve to an agent, such as arrangements for cleaning the property before the new owners move in, upkeep and watering of the garden and arrangements for a full set of keys, are also often neglected in private sales, he says.
Buyers should thus carefully weigh the perceived benefits of a private sale, he says. “They should ask themselves whether they really are saving money and whether it is worth running the risks.
“They should keep in mind that trained agents, especially those who are area specialists, will help them to make informed decisions by supplying pertinent information and will protect the interests of both seller and buyer not only during the sale but during the whole transfer period.”
Meanwhile homeowners who have been contemplating a private sale, says Everitt, should know that private sales still only account for a tiny percentage of successful home sales – in any market - “because although you can eliminate an agent, you cannot eliminate what an agent does, and most homeowners simply don’t have the time or knowledge to handle all the work required.”
This includes determining a market-related price for the property, qualifying prospective buyers, creating and paying for advertising, organising showdays or viewings by appointment, obtaining or drawing up a valid sale agreement, assisting buyers to obtain finance, and co-ordinating all the transfer processes.
He says those tempted to try their hand at private selling should also bear in mind that the estate agency industry remains just about the only one operating on the “no gain, no pain” principle, in that the client only pays for the services he receives if these generate a successful outcome.
“As for private seller organisations or ‘discount’ agencies, they will usually take a fee from you upfront – ensuring that they will get paid whether or not the you conclude a successful sale.”
Author: Meg Wilson