Underlying factors in property transactions

undertakes in a lifetime.

For this reason it is incumbent upon every potential property dealer to understand fully the intricacies that are involved in such transactions.
Normally, these transactions involve terms that govern the roles of buyer and seller, their rights and obligations and it is in the best interest of every person involved in a property transaction to be fully conversant with their role.
Real estate agents are best suited to deal with questions of market trends and property value.
It befalls the potential buyer/seller to find for themselves the agent who is best suited to provide the service they require.
The estate agent must be registered with the Estate Agency Council, which regulates the activities of estate agents in the property industry.
Make sure that the estate agent works for you, basing on the fact that the estate agent gets their pay after a successful completion of the sell.
Thus, it becomes in their best interest to sell the property.
If the agent is working for the seller he is inclined to work in the seller’s best interest.
If the agent is representing the buyer he is required to work in the buyer’s best interest.
It is imperative that the person who intends to buy/sell a property creates a relationship with the agent so that the agent works in their best interest always.
It is prudent to work out the sums first before doing the transaction; the excitement of purchasing a property might blind one to other expenses that may be involved in the transaction.
If the transaction involves a loan, working out the cost of loan, interest on the loan and the rate of return on investment before transacting is best otherwise, one is prone to raw deals.
If the property is still under a building society it is advisable to inform them when the decision to sell is made otherwise any late actions may make one liable to penalties.
It is always best to be fully knowledgeable about the building societies rules and regulations.
On the issue of rules and regulations it is wise to pay special attention to the agreement that governs the relationship between seller and buyer.
It is commonplace that buyers in the excitement of finally purchasing the property of choice just skim through this part of the process in a bid to finally put pen to paper and do not interrogate the words that bind them together.
The clauses that matter the most are those that govern what happens when someone defaults, normally termed “default clauses”.
If reading is a big problem for one, then make sure that one is fully conversant with the default causes, their meaning, extent and implications.
The importance of the agreement is revealed the moment something goes wrong, and when something does go wrong, these clauses become the referral point.
It is worth noting that there is nothing called a “standard agreement” all parties to the contract have more than just a right.
It is therefore incumbent upon them to make sure that the terms they intend to be in the contract are included, if not, then they are at least negotiated.
Unless otherwise stated by a special arrangement, estate agents commissions are normally the obligation of the sellers.
The seller is also liable for capital gains tax payments. This payment is made before the transfer is concluded.
At this moment in Zimbabwe, capital gains obligations are 5 percent of total sale price for all properties that where owned before 2009.
Any property that was transacted after this incurs a 20 percent capital gains liability.
Where the property is let out to tenants, it is commonplace that tenants will not be up to date with payment for rates, electricity or telephone services.
Before a transfer is concluded, the practitioner in charge of conveyance has to be in possession of a rates clearance certificate.
In most cases it is the seller that ends up meeting that obligation.
All this money has to be subtracted from the funds generated from the sell price and whatever is left after paying off these obligations is the take home for the seller.
Although the seller nominates the preferred practitioner to conveyance, the buyer is obligated to pay the transfer and legal fees for the change of title deeds.
So when making an offer on a property, one has to consider the expenses that will be incurred in the likelihood that offer is accepted.
These are but some of the few things that the seller and buyer have to keep in mind when transacting on a property deal.
l Vengai Madzima is a property consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected]