Eighty percent of Durban listings overpriced

Nearly 80 percent of residential property sales in the greater Durban area are being concluded below their asking price in the greater Durban area, according to figures released by property data supplier, PropValues.

PropValues year-to-date figures show that of the 2 646 units sold between January and the end of July 2006, 79 percent went for below their listing price while only 567 or 21 percent sold for their original listing price or above.

Commenting on the figures this week, PropValues Ross Sibbald said the figures underscored the need for buyers to insist on being given accurate and substantiated comparative market analyses (CMAs) in order to allow them to set market-related prices for their properties.

By his definition, a CMA is a report compiled by estate agents and other property professionals to determine the market value of a residential property. “This value is an accurate estimate based on the agent’s knowledge of a particular area and recent sales of similar properties in the same suburb.” He added that correctly pricing a residential property at a realistic market-related price was an estate agent's single most important contribution to a successful sale.

“It’s vital in the current market that sellers work with agents who have access to the right tools and the latest technology. Too often, the public is misled into over-pricing by inexperienced estate agents whose main motivation is to secure mandates or those who use outdated, inaccurate data.”

According to Sibbald, many Deeds office-based property valuation tools currently being used among agents do not include sufficient property details to compile an accurate CMA

His sentiments were echoed by Kerry Warburg, chairman of the Durban and Coastal Region of the Institute of Estate Agents of South Africa, which officially endorses PropValues. Warburg believes that agents have a moral obligation to deliver accurate pricing advice to their clients, ideally in the form of the data supplied by specialist property data suppliers. Warburg sees it as one solution to the rampant problem of over-pricing.

Warburg says current activity was indisputably linked to correct pricing. Evidence of this was that well-priced homes in the lower and middle sectors of the market were selling in healthy time frames of between seven and 21 days, while even the upper end of the market was seeing movement within 45 days of listing on average.

Network Listings chairman Dirk van Zuilekom said the Durban market was still buoyant but sellers were tending to price their homes according to what they saw advertised rather than what was being sold. Agreeing that there was a substantial difference between listing and selling prices now, he endorsed the value of well researched CMAs.
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