Mike Bester, CEO of Realty 1 International Property Group, highlights some of the risk areas that sellers need to watch.

First there’s the appointment of an agent. “Sellers can be easily misled into signing a mandate based on an inflated valuation,” says Bester.

“A good agent will ensure that he provides up to date documentation to support his valuation, and a seller should never sign a mandate simply because one agent has offered a higher price for his property than another.”

Once the agent is appointed, it’s time to get on and sell the house. For a seller needing to sell his property as quickly as possible, it may be easy to overlook the potential dangers of show houses.

“We still believe show days are one of the best ways of selling a property,” says Bester, “and there’s no doubt that these days it is more dangerous. However, agents should be trained to ensure that they minimise the risks to themselves and the homeowner.”

One way of doing this is by opening the gates only once callers have identified themselves and closing them again immediately afterwards. The agent should then accompany the visitors through the property, making sure that the group stays together and entering one room at a time. If a second group arrives in the interim, they can usually be asked to look around the garden while the agent is busy with the first group.

Once a potential buyer has indicated his interest in making an offer, the seller often believes he is half-way towards realising the sale. But he is not out of the woods yet, says Bester.

“Bogus buyers are by far the most frustrating risk in this business,” he says. “Oddly enough, some people seem to take satisfaction in raising false hopes for a sale on a property. Occasionally, they even sign the offer to purchase before disappearing, and of course they leave no trail to follow.”

Once signed by the buyer, the offer to purchase is presented to the seller. The offer may include suspensive conditions, such as the need for the buyer to first sell his existing property and to obtain a mortgage bond. In such instances, there should be a specific time frame allowed for the sale of the house, and for a mortgage bond a definite amount must be stipulated for which the buyer needs to qualify.

“If these items are not specified, it means there are loopholes in the agreement that can be exploited at a later stage,” says Bester.

The seller also needs to ensure that he is aware of any automatic time extension written into the agreement.

“Such clauses are completely acceptable, provided the buyer and seller are both aware of the exact meaning of the wording and are in agreement about the condition,” says Bester.

Finally, the seller needs to attend to the cancellation of the existing bond. Most banks require 90 days notice of cancellation on an existing bond, and if this is not given timeously then penalties could apply. But Bester says it’s difficult to know exactly when to give notice.