The current residential property market in South Africa is showing strong signs of recovery across all segments of the market, and solid growth is expected in this area of the economy over the next few years. In addition, the lower and middle sectors of the market are set to benefit from the recent reduction in transfer duties and this is likely to encourage more first-time buyers to enter the market.
This is according to Jonathan Davies, joint area manager of Pam Golding Properties Hyde Park. Davies says that with shortages of residential property stock very much in evidence in most metropolitan area and growth hubs around the country, the residential property market has shifted in favour of the seller once more.
“For this reason some home sellers now have high expectations, believing that their properties will be snapped up soon after they are put onto the market, no matter what price they ask,” explains Davies. “However, the homebuyers and investors of today are extremely savvy, making it their business to thoroughly educate themselves about their target property markets before they commit to buying. They are looking for properties that have the potential for good capital growth and are only prepared to pay realistic, market-related prices for these.”
“Sellers, on the other hand, usually want to extract maximum value from the sale of their property in the shortest possible period of time. Few of us can afford to sit with such a large asset as a residential property, so sellers are looking to complete their transactions as quickly, seamlessly and cost effectively as possible. It requires considerable thought and planning to achieve this,” adds Davies.
He says that it makes a lot of sense for the seller to find a property consultant with a good track record to assist in the process of taking a home to market. “They should be an expert on your suburb, be able to give you a feel for your local market, provide insightful advice on pricing and home presentation, as well as possess the means to market your home effectively. Trust is key in this relationship, so selecting the right agency is vital.”
In Davies’s view, sellers must get a number of key aspects right if they wish to make a hassle-free sale. He says of overriding importance is that the home is priced to sell. “This is particularly critical as buyers are not surprisingly considered in their approach and are carefully watching out for properties representing good value to enter the market.”
Many new buyers view the home within the first two weeks of it coming to market making it very important to present the home at the right price. Once a buyer has declined a home it is often very difficult to create new interest, as psychologically they move on to other homes and this large initial pool of buyers is lost.
Of added concern is that, if a property is on the market for an extended period of time, some potential buyers may start to question whether it is indeed overpriced or if there is not a hidden problem with the property.
Trish Luthuli, new business executive at Pam Golding Properties in Gauteng, agrees. She says some sellers are so focused on making the most from the sale of their property that they fail to pay attention to some guidelines that could assist them to realistically price their asset.
“It cannot be emphasised enough how important it is to ensure that the price of a home is market related,” notes Luthuli. “We always say that any home has four prices: the one the seller thinks it is worth, the one a valuer feels it is worth, the one an agent says it is worth and what the market is actually prepared to pay for it.”
It should be kept in mind that local property markets and suburbs are constantly in flux and it is therefore crucial for sellers to be in touch with the latest developments in this regard. If the average property selling price on your street is approximately R3 million, for example, you are probably asking too much for your home if you try to market it for R5 million. That is of course unless your property offers something substantially different or unique from the other homes in your area.
Pam Golding Properties understands that pricing is key in the home selling process. This is one of the reasons why we place such an emphasis on employing property consultants who are nothing short of area specialists. It is also why we will undertake all of the research necessary to assist clients to make their sales.
If the seller decides to use estate agency services they can choose whether they would like to use just one agency or employ several to assist with the sale. These are respectively known as sole mandate and joint mandate arrangements. Davies explains that a mandate is an instruction or authority given to and accepted by an estate agent to render an estate agency service to the seller. Mandates, whether joint or sole, are legal contracts between the seller and the real estate agency.
“In our view, appointing an estate agency on a sole mandate basis makes a great deal of sense. A sole mandate is a commitment by the seller to a particular property consultancy for a stipulated time period and it allows the agency to take full responsibility for, and to deploy greater resources to, the marketing of the home.”
According to Davies, the exclusive mandate of Pam Golding Properties offers a number of benefits, including access to the formidable expertise and experience that is available through the agency. Not only is the Pam Golding Properties’ sole mandate system designed to guide sellers through every aspect of their sale, but it offers them a comprehensive property marketing system that utilises a mix of cutting-edge digital and traditional media. Pam Golding Properties also has an extensive database of potential buyers to ensure the property reaches the correct market at the best possible time.
Davies says that in order to provide the properties of clients with considerable additional marketing exposure, Pam Golding Properties has developed a series of property showcase exhibitions that will run for several weeks in a number of Johannesburg’s premier shopping centres from 21 April to 8 June around Johannesburg.
“It is certainly of vital importance to have your house priced correctly when it is taken to market. However, your home, which is your greatest asset, also needs maximum exposure to the appropriate markets at the right time if you are to extract maximum value from it. A sole mandate with an agency with the necessary expertise and marketing leverage behind it can assist you to achieve this,” notes Davies.
According to Luthuli, a conveyancer, a property lawyer who handles the transfer of the property of the seller’s behalf, will handle the property transaction to ensure the transfer goes through smoothly and timeously.
It should be noted that the seller is liable for paying the agent’s commission, bond cancellation fees, municipal rates and taxes, levy amounts owing to body corporates or homeowners associations, as well as a number of certificates including electrical, electric fence, gas and plumbing. A certified copy of title deed is also required. And, if the seller failed to give the bank three months’ notice to cancel the existing bond, penalty bond interest is payable on the property they are selling if it is bonded.
Once the conveyancer receives all the required signed documents from buyer and seller and the necessary verification of the documents has been completed, the conveyancer will then lodge these at the Deeds Office. Luthuli says the review of the documents takes between seven to 10 working days, after which the conveyancer registers the deeds, and ownership passes from seller to buyer. The buyer’s new bond is then registered and the seller’s existing bond is cancelled.
A final account is drawn for the seller and buyer and the seller then pays out net proceeds and agent’s commission. Once the deeds are registered, it can take up to three months for the Deeds Office to send the original title deed and mortgage bond back to the conveyancer who will then send these to the financial institution that granted the buyer the bond, or directly to the buyer if the property is unbonded.
“Remember to make sure that your property-related bills are paid up and your tax affairs are in order before putting your property on the market,” adds Luthuli. “If your tax is not in order, you will not be able to transfer the home into the purchaser’s name.”
“The value that you achieve on your property when you sell it is all too often directly determined by the quality of the real estate service that you receive. Pam Golding Properties’ agents always strive to get the best price for a home in the quickest possible time, with the least inconvenience to the client,” concludes Luthuli.
This article “Sound Advice Mandatory When Selling Your Home” was issued by Pam Golding Properties SA.