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Property Investor Advice Column: Part 9 and 10

Property Investor Advice Column: Part 9 and 10

Part 9
Going it Alone

Should you sell your property privately?

Estate agents perform a vital role in most property transactions. And, as the experts in the field, they have the know-how and experience to get the best deal for both parties. There are, of course, always people who have the time and knowledge to do it themselves. If you do opt to sell your property privately, however, there are some important considerations that must be taken into account.

The first is putting the property on the market at the correct price. Estate agents have access to tools to help them to value a property and to judge what will be suitable for the area, but there are also free property reports available to help a private seller. It’s crucial to get this right because if the price is set too high, the property may not sell, and if it’s too low, you could lose out.

If you’re selling a home you’ve lived in for many years, you may be blind to its faults. This might not only lead you to over-value it, but may deter potential buyers if what they’re seeing doesn’t match what you’re telling them. It may therefore be worth having an independent contractor in to have a look around the house to identify any obvious defects, and to quote on what it may cost to fix them so that this can be factored into the sales price.

Don’t, however, make the mistake of doing too much renovating before putting the property up for sale. While there are obvious benefits to fixing major problems, don’t overcapitalise because you may not recover the expense.

It’s also vital to bear in mind that when selling a property you’re not just negotiating a price, but also the terms and conditions. The best approach is to have a conveyancing attorney help you through the selling process, drawing up an offer-to-purchase agreement and any other documentation required. Make sure that any known defects are disclosed to protect both you and the buyer.

Estate agents also have an advantage when it comes to marketing a property. They not only have budgets for advertising, but also databases of people looking in specific areas for properties within certain price ranges. The private seller, on the other hand, has to rely on websites or classified ads. In addition, when selling privately, you have to be available to show potential buyers around the property, and as this has to be done at times that best suit those potential buyers, you need to be flexible.

When agreeing on a sale, don’t neglect to find out where the money is coming from. Does the buyer need to sell another property first or obtain a bond? This may delay the transaction and possibly derail it if it doesn’t work out as planned. Make sure that any agreements include timelines so that you’re not bound to wait indefinitely for the buyer to come up with the money.

Finally, remember that you haven’t really ‘sold’ your property until the change of ownership is lodged at the local deeds office. Your attorney will be in the best position to do this, and to help you get the necessary clearance certificates from the municipality.


Part 10
Cover Yourself

If you’re renovating, don’t neglect your insurance.

Renovating your existing home is often more appealing than looking for a new one: you don’t have to leave your neighbourhood, family and friends, and you don’t have to take on the costs and disruption of buying, selling and moving. Something that many people neglect to take into consideration, however, is the effect that home renovations may have on their insurance policies. The risks are that your current policy will either not cover any damage caused by the work crew or will simply fall away.


You must inform your insurer of your intention to renovate from the outset. Check that your policy will remain in force for the duration of the work. This is particularly important if you’ve chosen to move out of your house for the duration, as most insurance policies stipulate that someone must be staying on the property to reduce the risk of burglary. If you wish to leave the house unoccupied, make sure to clear your decision with your insurer.

Extensive renovations might even require a reclassification of your policy. For example, if an exterior wall is being replaced, or some of the roof taken down, then your home might have to be considered a ‘building under construction’ rather than a ‘family dwelling’ during the process.

It’s vital to make sure that any renovations are pre-approved by the necessary authorities, as your insurer could deny your claim further down the line if it’s found that the alterations do not conform with legal and building standards.

Use a reputable and licensed contractor – it may even be worthwhile speaking to your insurer’s claims department for recommendations. Homeowners may place themselves at risk of having a claim turned down if the work is not carried out by a licensed builder and it later deteriorates or collapses.

Check that the contractors you choose are properly insured. They should carry enough cover to fix any damage they cause or even for the total loss of the house arising from their negligence. Put this agreement in writing to back you up in the case of potential liability.

Ensure that the company has insurance for its workers, too, so that you don’t risk being held liable for any injuries they sustain while on your property – and even if it does have such cover in place, it may be worth reviewing the amount of liability cover you have, just to be safe.

It’s also a legal requirement for the building owner to compile a Health and Safety file that contains information about any risks on the property that need to be managed.

Finally, once the renovations are complete, don’t forget to review the amount of cover you’re carrying. If you’ve made significant changes to the home or added more expensive interiors, such as marble countertops or a new stove in the kitchen, then you must inform your insurance company of these upgrades. It might even be worth having the insurer conduct a new valuation of the property and adjusting your premiums so that you’re always fully covered.

Extensive renovations may require a reclassification of your policy.


Next issue: What to look for in an estate agent; tips for buying a home in a sellers’ market.


Text: Patrick Cairns
Images: iStock


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