When a property doesn’t sell

The South African property market today is a far cry from its 2007/8 heyday. Prices have come down significantly, homes are often on the market for longer and buyers are far pickier due to the increased selection they have to choose from.

That does not mean that homes aren’t selling though, they are – for the right price. According to the April FNB House Price Index last month “showed increased acceleration, up from a revised March growth rate of 8.1% to 8.6% year-on-year. This is the highest year-on-year growth since June 2010”. The bank’s Property Barometer continues to indicate that “the 1st quarter of 2012 saw an acceleration in house price growth in almost all segments of the market when segmented by room number and title deed”.

So why are some properties stagnating on the market? Is it purely due to the buyers being spoilt for choice? Hardly, in fact there are a number of factors to consider.

Location, location, location; the old adage remains true. Properties in prime areas will always have a better chance of selling at the asking price and, selling sooner. If that’s not the problem though, the condition of the home could be. While there are buyers looking for fixer-uppers many want their new home to be in a reasonable condition – especially if the sales tag is fairly substantial. Buyers who are willing to do renovation work often subtract the cost from their offer.

As such sellers need to ensure that the property is neat, well-maintained and that the electrical and plumbing systems are in working order. If not, the property likely won’t fly off the market. “Agents are not only experts in their areas, they are also professional sales people and can give valuable advice on what’s needed to move a property”, says Bruce Swain, MD of Leapfrog Property Group.

If the issue is not the location or the condition of the property then it might very likely be the asking price. Properties will always sell – for the right price. The question is – is the property accurately priced based on its size, amenities and the area it’s located in? “Assessing the value of a home is part science, part experience and dependant on a variety of factors,” says Swain, “however sellers would be well advised to compare their asking price to that of other properties in the area to get a firmer grip on their prospects.”

The current local situation however does lead to a number of properties for buyers to choose from and as such even a correctly priced, well situated home could end up on the market for a while. In such a situation, depending on the reasons for selling, it might be wise to hold on to the property for a while. The real estate market is cyclical and prices will firm in time.

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