As a buyer most people think they can save a great deal on estate agent commission if you cut out the middle man, which does make sense! This is not always the case though, in fact cutting out the middle man not only opens you to new and unknown risks but you may even end up paying more thanyou bargained for.
People selling their property privately usually worked out all costs beforehand, what does this mean to you?
Well for starters the seller knows exactly how much the estate agent would have charged in commission and usually adds on that amount to the selling price anyway regardless of the estate agent not being involved. It's a nice bonus for the seller but to you as a buyer this means you might as well have went with an estate agent.
There however are some good deals out there from honest, legitimate private sellers and sometimes cutting out the middle man can save you quite a bit of money. Keep reading to find out more about the risks and benefits!
This is the part we all really care about, the risk! Let's say you're in the market to buy a house for R1 000 000 (one million rand) but you would prefer to pay only R800 000 (eight hundred thousand rand) so you still have some cash left for renovations or to buy that nice sofa you always wanted.
Fine and dandy, let's cut out the estate agent and buy privately from this guy we know through a friend of a friend! You go to look at the house and everything is absolutely perfect and what do you know, the guy is willing to settle for R800 000! What luck!
However the first day you move in you notice that all the curtain railings, blinds, light fixtures, sprinklers, ceiling fans, mostly everything except the closet doors in the house you saw that day...are gone! What now? Oh ... look in the contract ... it says 'voetstoots' there really small at the bottom..and mentions how all improvements made to the house by the previous owner will be undone and removed. Yup ... you just got caught with the oldest trick in the book.
Private Sellers will often try to sell their property 'voetstoots', which means as is (without having to repair any damage to the property) and will often add ridiculous little clauses to the contract such as you losing your deposit on the house if you don't get a home loan within the next 3 days! Beware, always read your contract in fine detail and contact a lawyer if there is something that doesn't quite make sense to you. However, the new consumer protection act may be of some help here, but it's still wise to consult with your lawyer before buying property privately.
You cut out the middle man, you save. Easy as that, sometimes it happens to be true too. Cutting out the estate agent can save you quite a bit of money providing the seller is honest and not trying to scam you by adding what the estate agent would have charged to the price of the home and taking it for himself as a nice little bonus or adding absurd clauses to the contract to purchase.
Usually deals like these can get you a home for much cheaper than what it's really worth and turns out to work rather good for both the buyer and the seller. The seller might want to move somewhere else and just wants to sell his house quickly without any hassles or many people bothering him to view the property. There are many instances where buying privately saves you time, effort and money.
Estate Agents have many benefits to lower your risk of buying a home, if you don't want to take the risk of buying privately we suggest you get in contact with a few estate agencies. Estate Agents are not only trained and experienced but have that trained eye to spot whether either party is being led around by or her nose. In the long run an estate agent pays for itself by ensuring you get what you pay for!
You can save a fat amount of cash if you buy privately but it can be risky, even dangerous. Estate Agents are trained professionals who can spot fraudsters and can protect both parties involved for a quick and painless transition from buyer to home owner.