Best practice home selling in this market
Category Blog
Selling a home at or close to top market price can be a challenge at the best of times. But it is clearly more so in the face of the complex economic, political and social circumstances that now confront South African homeowners and buyers alike. We all know that the country’s economy has been thrust into global economic junk status. That it has come on the back of reported rampant public sector corruption and ‘state capture’. And that it is clearly set to gain more and more traction as the ‘GuptaLeaks’ revelations continue to roll out. Also, overhanging the market have been Parliament’s pending presidential no-confidence motion, and the governing party’s policy conference. Other sentiment-diluting factors include the apparent disunity in the ranks of the ruling party, the controversial new Mining Charter, and the current Public Protector’s reported move to reword the country’s Constitution! And, to crown it all, South Africa is in a recession.
Top price IS achievable
These and other factors have come together to create even more uncertainty in a market dynamic that seemingly makes it difficult for home sellers to secure the best possible price at this stage. But best price is possible to achieve – provided sellers take care to avoid the pitfalls normally associated with a downside market. Prominent among them is the misguided perception that the long-standing dominant estate agent in their suburb is the most effective route to a satisfactory sale. A good estate agent can work a particular residential suburb so successfully, and single-mindedly, that he or she eventually becomes its dominant marketing force. It is at that point that the agent could also become the biggest single barrier to optimal future selling prices in the area.
A new low threshold
The problem is rooted in perception. The agent perceives his or her dominance in the suburb to be both justifiable and invincible – and therefore tends to pitch asking prices to ensure a result. But not necessarily the best result. Therefore, the sale of the property will probably come in at lower than market price. The transaction thus inevitably becomes just another statistic with which to reinforce the agent’s dominance. At the same time, it will set a new low threshold for several houses in the neighbourhood. In fact, at their worst, area-dominant agents could affect the average prices achieved in a suburb, when compared with adjacent like-on-like neighbourhoods (where pricing is driven by healthy free-market competition between estate agents). Interestingly, the best suburbs to invest in are where there is healthy competition between similarly successful rival estate agents. In this day and age, consumers are all-important. Opting in or out is their prerogative. Therefore, agents should offer a service warranty which allows the consumer to cancel the sole mandate if the expected level of service is not met.
Best results
“For the best results, sellers should consider sole mandate proposals from up to three or four agents before making an appointment… preferably on a three to six-month term. The reality is that it is only in a truly free market environment, in which sellers consider proposals from a selection of quality competing agents, that the best possible price can be achieved.
Author: Ronald Ennik
