PRICE WELL, SELL FAST!
Over the past few years, many sellers have found themselves in the position – voluntarily or otherwise – where they have had to sell their properties for less than their original asking price.
Selling below one’s asking price is not a phenomenon restricted purely to a sluggish market, though selling below the asking price is nothing new. In fact, in my opinion, many houses sell below the asking price due to the fact that they are overpriced to begin with. Many properties are on the market at inflated prices. Buyers know this and consequently enter into negotiations below fair market value. The agent then has to try and condition sellers down. The upshot is laborious, protracted negotiations that attempt to close a massive gap in price. Obviously this is not an ideal situation, but it can easily be avoided.
Agents often overprice properties to receive the homeowner’s mandate. Agents and homeowners who overpriced their properties were floundering in the current market, despite the uptick in demand.
One way to check if a property has been overpriced is to track the average length of time that properties are on the market. Part of the reason sellers may have overpriced is that they may have based their prices on competing stock. If sellers price their properties right to begin with, they could avoid selling way below the asking price in the long run!
DON’T HOLD OUT FOR A HIGHER PRICE
Show days have been drawing prospective buyers and these days it is rare for properties to attract multiple offers – the market is currently a tough one. Be that as it may, there is still a big spanner in the works, and that is not having enough stock to sell.
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A quick survey among our agents recently revealed that in our most popular areas, there has been a decline of up to 60% in saleable inventory – with the properties that were available having either been sold or withdrawn from the market.
But those sellers who are backing out now in the hope that a rising demand among buyers will eventually enable them to get a much higher price six months or a year from now are making a big mistake.
The truth is that while there is a shortage of buyers at the moment, well-priced properties are still selling faster than those that are introduced to the market at an inflated price in the hope of receiving any offers at all. There are several factors at play now that mitigate against any really significant price increases in the coming months and all of these have to do with the fact that interest rates are widely expected to remain constant since the latest reprieve for at least the next few months.
In our current economy which depicts declining affordability, leading to lower incomes that prospective homebuyers have to put toward paying off their debt. This means they can only qualify for smaller home loans and become extremely value conscious and willing to negotiate hard to pay lower prices.
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Secondly, when interest rates start going down the banks get more wary about granting credit, and more conservative in their valuations of the properties on which they are being asked to grant loans. (Since the loan term is generally for 20 or 30 years and interest rates fluctuate greatly over that term, and banks need to consider the long term affordability of this when granting home loans.)
Once again, this translates into downward pressure on home prices and a dwindling supply of buyers. Consequently, the best advice for home sellers at the moment is to stay in the market, take professional advice on pricing their properties correctly and make the most of the current, sluggish demand to achieve a swift sale.
SHOW DAY VISITS REVEAL SO MUCH
A show day can tell you a lot more about a property than its layout or perhaps the condition of its roof – provided you ask the right questions.
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Prospective buyers should not be afraid to ask, for example, whether the agent has already had any offers on the property that is for sale. The answer to that question should give you a good idea of how other people have responded to the property and whether the seller is willing to negotiate. And that should help you to decide if you are really interested in buying this property and if so, how to frame an offer that the seller is likely to accept.
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Before you do so, you should also ask how long the property has been on the market. If it is getting a little ‘tired’, the seller might be open to a lower offer. Alternatively, he or she might be holding out for an unrealistic price, in which case you should probably just move on to your next prospect.
Prospective buyers should also ask why the current owners of the property are selling. “The agent showing the house might not want to discuss this, but on the other hand, the sellers might not mind you knowing that they are urgently relocating to another city for work, or that they are a bit uncertain about when their new home will be ready and would appreciate some flexibility around occupation dates. Again, any information that you can acquire will help you decide whether to make an offer and what terms might make it more acceptable.
WHY DO YOU NEED A CONVEYANCER?
A conveyancer is an attorney who is specialized in the preparation of deeds and documents registrable in a deeds office, and who has been admitted to practice as a conveyancer in the High Court of South Africa.
A seller often takes little interest in who is appointed as his conveyancer to act for him because the purchaser pays the conveyancer’s fees. However, even though the purchaser finances the transaction costs, the election to nominate rests with the seller so that the process can be driven by the party who has the least interest in delaying transfer.
A late transfer will cost a seller money in lost interest and opportunity cost and, if transfer of the property sold was intended to occur simultaneously with the property that the seller has purchased, delays can also cause much anxiety and embarrassment.
Therefore, exercise your right to appoint a conveyancing attorney by entrusting the realization of the proceeds of your sale to a trusted name. After all, it is not every day that one gets to choose something of value that someone else will pay for, especially professional services!
Ensure that the firm you choose can pride themselves on:
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Accurate and speedy processing of your transfer or bond registration.
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They should have State-of-art technology developed especially to enhance communication and service delivery to all parties involved.
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Instant notification and updates regarding the progress of your transfer or bond via SMS and e-mail.
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Have the ability to track the progress of your transaction online.
Why make selling your property or registering your bond any more complicated than it needs to be? Put your mind at ease by appointing the best!
Sinclair Estates is in long-standing relationship with a number of Conveyancers and will recommend the best with every transaction.