No bargains here, first-time buyers should keep their offers enticing

The property market remains favourable for first time buyers, especially in view of the decision of the Reserve Bank to retain the interest rate at the current historically low level, says Samuel Seeff, chairman of the Seeff Property Group.

The market continues to be active especially in the price bands below R2 million where the bulk of sales to first-time buyers are taking place.

A misnomer in the current market is often that sellers are desperate and that it is a good time to find a bargain price. This is unfortunately not the case in the market below R2 million and certainly not where properties are correctly priced for the current market.

The risk of not putting in an appropriate offer is that you might lose out on your dream home, says Seeff.

Gerhard van der Linde, managing director for Seeff Pretoria East says that an Offer to Purchase should be approached in a serious manner. To make a great offer to purchase, you need to do your homework, investigate, ask questions, then put your best offer forward.

To avoid disappointment, start with doing your due diligence upfront so that you can put your offer in with confidence. Check “for sale” and “sold” prices of similar properties for comparison.

If you need finance, ensure you are prequalified as this will carry a lot of weight. Sellers do not want time wasters or bargain hunters. Ask questions and get a sense from the agent about how the property is priced and if there is room to negotiate, then says Van der Linde, put forward your best offer. The closer to the asking price and more favourable the terms, the better the likelihood of it being accepted.

If you are a cash buyer, it will definitely count in your favour. If not, then Van der Linde recommends a substantial deposit which, together with your pre-approval, will make your offer more attractive. Remember, if you are reliant on mortgage finance, the “72-hour clause” which is a feature of Offers to Purchase will allow the seller to continue marketing the property for this period. If he receives a better offer and you are unable to match it, you could lose out. It is therefore best to ensure your offer is as solid as possible.

Tiaan Pretorius, manager for Seeff Centurion says that it is always advisable to minimise contingencies in your offer. Making your offer subject to first selling a home is unlikely to put your offer at the top of the pile. Time is money and there is risk involved for the seller. Thus, if you need to sell before you buy, especially if you need the equity on your current home to finance your new home, you are best advised to first sell your property before you put in your offer, especially if it is “hot property” that you have your heart set on.

While these tips should get your offer accepted, you should always be ready with a counteroffer, says Seeff. Before you put in your initial offer, you should consider whether you would be able to come back with a higher counteroffer. If there is a lot of interest in the property, it is best to rather ensure that your first offer is close to, or at the full asking price if you really have your heart set on the property. The highest offer will generally always win the day. Work with the agent and take their advice upfront.