Deciding to sell your home is almost always a tough decision for property owners and when market conditions are not in your favour, the decision is more difficult.
It is still a buyer’s market in South Africa, meaning sellers must accept their homes will be on the market for longer and fetch less. This means listing properties at the right price is central to the success of a sale, estate agents say.
But as Capetonian Lance Witten has discovered, finding this “right price” can be complicated. There are also other complexities such as knowing whether to sell or buy first. Witten’s two-bedroom apartment in a small Wynberg Village complex has been on and off the market for about 18 months. He purchased it for the asking price of R1.15 million – which, he says, was his “first mistake”.
When he put it on the market, he listed it at R1.3m. Although there was a buyer, she disappeared. “It is not on the market at the moment but I know homes in my complex have recently sold for about R1m to R1.2m.”
The property is a freestanding home in a secure, gated complex of 15 homes. “I’ve been toying with listing it again but I am so scared I won’t find anything to buy in time, should it be sold,” Witten says.
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The right listing price
Listing a property at the right price from the outset is the key to selling within the fastest time frame and for the best price, says Alison Robb, a sales agent for Dogon Group Properties.
This requires “specific area knowledge, and an understanding of the conditions surrounding the market”, which an experienced professional who markets homes in the area will be able to assist with.
Roger Hoaten of Seeff Berea agrees: “Your agent should be able to justify the valuation you have been given based on similar sales in the area, current market trends and buyers’ preferences.” Knowing how low to go Even so, sellers who have their homes listed for the right price will undoubtedly be offered less by willing buyers which means, says Debbie Bennett of Prime Estates, sellers should always be prepared to consider reasonable offers.
“If sensibly priced, a drop of R50 000 to R100 000 can still be expected (in the current market).” Depending on one’s needs and urgency to sell, and especially if there is a shortage of buyers or if the property has been on the market for a while, Robb says sellers should expect to be offered between 10% and 20% below the asking price.
“On average, a home priced at around 15% to 20% above its market-related value is much less likely to sell within its first month on the market, compared to a home priced within 10% of its market value. However, if your property is well priced it may even sell for close to or for full asking price.”
Hoaten says sellers of wellpriced properties should expect to be offered 10% less than they are asking.
To sell or buy first?
Experts advise selling your property first. “I always advise owners to sell first so they know the maximum they can afford for the next property. They will also then be able to strengthen their offer – as they can make an unconditional offer on the next property,” Hoaten says.
In a buyer’s market Robb also advises her clients to sell first, especially if they need the equity to finance their new home.
“Selling before buying makes the most sense for those who are selling in a buyer’s market as your current home may take a little longer to sell. You can wait for the perfect offer and can negotiate confidently for a top sale price on your current home, and take your time finding the right home.”
Echoing this, Bennett says: “Once there is positive interest and a sale, you will be in a far better position to buy and negotiate a good price when you are a cash or ‘cash and bond’ buyer without any suspensive conditions.”
With or without an agent?
Selling without an agent is possible, but not recommended. “Leave it to the professionals. Selling is quite an involved process and private sales inevitably fall through or incur delays, which can have devastating effects.”
Agents have access to a range of tools and skills not available to sellers, Hoaten adds. “They are skilled marketers, negotiators and have the legal knowledge to protect buyers’ and sellers’ interests. They are experienced in dealing with the many pitfalls and risks associated with buying and selling.”
However, this does not mean that selling a home privately is a no-go. Robb says going it alone “puts you in charge”. But it does add extra stress and time. “A private sale could give you more control if you are not in a rush but keep in mind that a good estate agent will have his/her own database of buyers and will know the area.
“A good agent knows what buyers in area are looking for, and will be able to give you clear advice on how to maximise your property’s appeal before listing. Quick sales happen when a property is priced accurately, marketed well, and exposed to a pool of suitable, serious buyers.”
Also many buyers are actively wary of private sales as there is always a risk of complications from substandard paperwork or legally non-compliant processes. “Most buyers willing to risk a private sale are aware that the seller is not paying commission and will often reduce their offer accordingly,” Robb adds. Give your home the best chance of selling Sellers should opt for exclusive mandates as opposed to open mandates, she says.
“Properties on an exclusive mandate achieve, on average, a better selling price than those on an open mandate and also typically sell in a shorter period of time.”