Homebuyers and sellers should re-think their strategies in the current property market, placing less emphasis on price as such and more on matching their respective prices.
Gerhard Kotzé, CEO of the ERA South Africa property group says this may appear self evident, but that all too often buyers and sellers set their prices independently of one another due to their own pre-conceived ideas of what their property is worth or under the influence of inexperienced agents, and thus set deals up for failure.
“This goes beyond mere over-pricing. It’s a question of working closely on price levels that will facilitate, rather than impede a sale, even if that means both parties accepting prices that are lower than ruling prices in their area.
He adds that the simple message is that properties are taking longer on average to sell, so the market is telling buyers and sellers what they need to do to bring each other closer at the bargaining table.
“For example, when a seller has accepted an offer to purchase, subject to the sale of the buyer’s property, both parties are bound to the agreement for the period the buyer has been given to sell his property. However, although the seller has an offer on the table, it is essentially meaningless if the buyer cannot sell his property and the deal will fall away.
“In such a scenario both buyer and seller should compromise and adjust their asking prices to ‘meet halfway’ and secure the transaction.”
Kotzé says estate agents have a key role to play here in that both buyer and seller should be correctly advised on pricing to give them the greatest chance of success.
“And of course this should be done at the outset of the mandate, not at the end when a deal has fallen through and the respective homes are then taken off the market or the marketing process has to be re-initiated. Frequently this leaves both buyer and seller in a weaker bargaining position with their homes having been on the market longer than they should have.
“Another benefit of correct pricing is that costs such as transfer duties, conveyancing fees and agents commissions are reduced when the seller and buyer’s respective prices are lower, which further enables the transaction.”