Use an estate agent who can say “No”
Category Blog
That’s my advice to home sellers in the current relatively slow-moving Johannesburg/Sandton homes market.
In this market scenario, it is essential that a seller squeezes the maximum value that he possibly can from his property sale.
That is best achieved by using an agent who can draw a line in the sand and say: “No! That offer is not acceptable.”
How does the agent do that when knowing full well that the buyer will simply go to the next agent and say: “Will you take my low offer?”
Only agents armed with sole mandates can do that in a property market that has been largely dampened by the economic, political and social uncertainties that South Africa currently faces.
Agents without sole mandates feel threatened by the prevailing negative market circumstances and influences?
Ridiculous steps
To what extent are they taking ridiculous steps to ensure that they remain on board in the estate agencies within which they operate?
Is their focus on self-preservation compromising their achievement of best possible price for sellers?
These are pertinent questions in a residential property market that has been largely dampened by the economic, political and social uncertainties that South Africa currently faces.
Under an open mandate, the agent is inevitably compelled to take the low offer – and then begin the negotiation with the seller. But, unfortunately, the process has started at too modest a level.
A sole mandate is different. The buyer has no choice but to engage with that original agent, who says: “No. you can’t come in at R4-million on a R5,5-million asking price,” for example.
Push the offer
By doing so, that agent has a greater ability to push the offer to come in at, say, R4,5-million – which at least starts the negotiation with the seller within the right parameters.”
And, ideally, the sale will be sealed at a price more adjacent to seller expectations than if there were a number of agents working on the property – each prepared to take virtually any offer no matter how low.
Sellers should expect that the only way to achieve a good price is to create competition on their property.
But many sellers have a misconception that that competition between agents will do the job. But, in fact, it has to be competition between buyers – not agents.
Sure, a good agent can create tension and competition between buyers in order to nudge the price upwards. But a solid sole mandated agent will also have the strength to say “No” if the initial price offer comes in too low.
And he can do so without fear that the buyer will proceed to take his low offer elsewhere. He simply cannot do that under a sole mandate.
Author: Ronald Ennik
