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HOUSE PRICE TRENDS HIGHLIGHT IMPORTANCE OF CORRECT PRICING

After a slightly more buoyant end to 2010, there was a spirit of optimism in the market-place and the general feeling was that we were finally seeing signs of recovery in the property market. This year (2011 to date) while Pam Golding Properties has achieved an increase in unit sales, or sales volumes, it seems that generally house prices remain relatively flat in many areas, depending on location.

The latest statistics from Ooba reveal that there has in fact been a year-on-year decline of 6.5 percent in the national average purchase price recorded as at April 2011, which naturally varies according to price sector, location, and various other factors, says Carol Reynolds, Pam Golding Properties area principal for the Durban North and La Lucia areas. “While there are some perennially sought after areas which buck the national trend and reflect positive growth, general house price trends highlight the importance of correct pricing in today’s market.

“It is a noticeable trend in the marketplace that buyers continue to offer market-related prices on properties while sellers endeavour to come to terms with the reality that their homes may not achieve the prices they’d hoped for. Essentially, the determinant of price is what a willing and able buyer is prepared to pay and what a bank will finance based on its own valuation of the property. If, for whatever reason, a buyer is prepared to increase his offer beyond the correct market value, the bank will simply not find value and the deal will fall by the wayside. Thus, despite the willingness of buyer and seller to enter into an agreement, without the correct price, their efforts may come unstuck when the third and most critical party – the financier – becomes party to the transaction.”

Reynolds says unfortunately, pricing is not an exact science, and often the seller has a figure in his/her mind, based on personal needs. “For example, we have sellers who wish to upgrade, and hence require a certain amount of money for their new home. Their needs cannot, however, be utilised as a price barometer. The best way to establish price is by enlisting the services of an experienced agent, from a reputable company, who is an area specialist and has sold a number of properties within the vicinity of the seller’s home. An experienced agent will be able to substantiate his/her valuation with credible data – facts and figures of properties actually sold in the area, and also variances between asking and selling price.
“On the whole, studies have shown that over-pricing results in long turnaround times, and lower selling prices. Properties that enter the market at inflated prices simply do not sell, and end up becoming stale and undesirable to the buyer pool. It is critical to adopt a professional approach to both the marketing and ultimate sale of a home in order to fetch the best price within the context of current market conditions.  Sellers should always take the first offer seriously, and should be mindful of agents trying to buy mandates by inflating their valuations. At the end of the day, the best service we can offer a seller is a conclusive sale at a fair price, and trying to own stock by placing it under mandate at incorrect prices is not only doing a disservice to our sellers, but also to ourselves,” she says.

Issued by Gaye de Villiers
Tel: 021 6837788 or 083 325 1939


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