Selling and buying property is much more than simply placing something “on the market” and hoping for the best. Understanding the prevailing conditions is an essential part of the game. This is all the more so in tough times. So is the Western Cape at present a buyers’ or a seller’s market?
According to Denis Quayle, Principal at Harcourts Maynard Burgoyne Constantiaberg, the picture is mixed. The demand for housing certainly exceeds the supply, but the demand is specific. “Pricing property correctly is very important. Buyers are not as flexible as they used to be, but if something is priced right, it can sell quickly. We’ve had properties move in 12 hours.”
Dave Brown, property consultant in Harcourts Maynard Burgoyne Pinelands concurs. In the Southern Suburbs, stock shortages are driving prices up. Some agents are compounding this by overpromising to prospective clients. This raises expectations, but typically these properties just sit.
Buyers often know the market better than sellers – after all, they have been examining options, while sellers may be committed to disposing of a single piece of real estate for which they want a particular price. Where this is unrealistic, and where sensitivities are heightened during stressful times, properties can go unsold months.
Dave Brown cautions that tools available to clients today, such as online valuations, can lead to inflated expectations, particularly on the part of sellers. “These tools will give you a figure, but base their valuations purely on erf size and location. They don’t take into account building square meterage, the state of maintenance, presentation, fixtures and fittings on a property and that sort of thing.”
He adds that sellers often mistakenly assume that asking prices for properties are an indication of what properties have actually sold for. This is often not the case, and the difference between what a seller may want and what he or she will ultimately accept can be very large.
“People often look at property publications, see houses listed for, say, R3.5 million, and assume that’s what they can get. But in reality, the transfer price can be far lower, and a much more accurate gauge of what the market can accommodate. It’s not uncommon for me to see a property start at R3.4 million end up selling for around R2.7 million.”
Denis Quayle says that to get the most out of the current market, buyers need to choose the right agent, someone who understands the realistic potential of the market, and can design a strategy to get an optimal return. This is precisely why Harcourts provides its agents with extensive research, communications and advertising support. It is also why Harcourts agents are trained to plan transaction strategies.
To agents, Dave Brown stresses the need to price properties correctly so that they sell. This often means convincing clients of the realities of the market. Be clear and transparent and explain how your price is determined. “We value a property, and then present our clients with facts and figures to help them understand how the price is arrived at, and that it is something that is doable under present conditions.”
Denis Quayle stresses the importance of high visibility. “Connect with sellers and get stock to sell. Make sure your clients are getting the value they deserve. And market yourself – though print, online, and personally. So when owners look to sell, it’s you and Harcourts they think of.”
This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Errors and omission excepted. (E&OE)