In 2013, homes put up for sale in South Africa were taking on average 120 days to sell.
“In the last four months,” says Wayne Albutt, Western Cape Regional Sales Manager for the Rawson Property Group, “the average sale time has in the major metropolitan areas dropped to below 30 days – and in the real estate marketing world today dozens of sales are being put through in three or four days.”
“In today’s trading circumstances,” says Albutt, “the home seller may well plan to get himself an offer within 24 hours of selecting his estate agent – and there is a good chance that the offer will be at the asking price or very close to it. Currently where the Rawson Property Group is involved, selling prices are averaging 98% of the marketing price and in many instances properties are being sold for above the marketing price”.
So far, so good – but, says Albutt, quick, wholly satisfactory sales can sometimes have disheartening repercussions for the estate agent, and possibly in the heart of the seller.
Why is this?
“Because”, says Albutt, “the seller, out of touch with the market, may well have expected the home to sell in three to six months and he may now start asking questions like “did the agent undervalue my property?”
The second question is likely to be “is the agent entitled to their fee for the perceived work involved?”
Questions of this sort, says Albutt, reveal clearly, understandably so, how little buyers and sellers understand the daily working life of an estate agent.
“What the seller, making these comments, is overlooking,” says Albutt, “is the simple fact that the agent has probably been dealing with a host of potential buyers for six months or more. He has kept in touch with them and reported back to them regularly, waiting for the right property at the right price to materialise for each one. When he now seizes the opportunity and successfully facilitates a sale, he is capitalising on many months of patient liaison with a broad spectrum of clients and all the work that this may have entailed.”
South African agents typically service a territory with some 2000, or more, properties. This means that a good agent will have had to remain more or less in touch with 2000 potential clients at any one time, and that’s just representing the pool of potential sellers. Then there is also all the work and consultations with potential buyers through their marketing efforts. When one of these relationships produces a sale, this has been the result of months and months of previous work.
On the question of whether the home which sold fast was underpriced, Albutt says, “again, that is very unlikely – it was probably sold above market price because, in vying for the mandate, some agents may have slightly overpriced it, knowing that today’s metropolitan buyer faced with a slightly lesser rate of supply, or stock, may be ready to make a offer because he realises that his chances of finding another suitable home, within a reasonable time, are far lower than they were 24 months ago.”
Should the seller, as occasionally happens, decide that in view of the quick response from buyers, he will reject the first offers and chance his arm by putting the house back on the market at a higher price, he’s likely, says Albutt to be seriously disappointed.
“Let’s suppose his R1,1 million house is now back on the market at R1,4 million. What will happen? Firstly none of the formally interested buyers will come back to him, while others will see the home as overpriced, especially if they know its marketing history. It will in all probably then stick on the market, gain a bad reputation and if it eventually sells, several months later, it will be at below its true, or initial, market value. Buyers are very savvy and have much more information at their fingertips than before. They compare properties against each other and an overpriced property is clear to spot.”
What advice does Albutt have for sellers in high demand areas today?
Firstly, find a reputable agent, one whose reputation in your area can be vouched for. Also, pick an agent you genuinely like rather than one you simply admire so that the whole transaction becomes enjoyable, not stressful.
Further, do not feel in any way obliged to accept the agent who brings you the highest market valuation. He or she has probably raised the home’s value in the hope of securing the mandate. Finally, decide in consultation with your agent of choice what you consider a fair and acceptable price to be and accept any genuine offer at that level – even if it is the first that comes in.
Experience shows that good agents will very often bring the best offers to the buyer first and these are the ones to most seriously consider. Lastly a property is never really sold until all suspensive conditions have been met and all guarantees are in place.
This article “Mixed Reactions To A Quick Home Sale” was issued by Rawson Property Group – http://www.rawson.co.za/