South Africa’s property market currently favours buyers, and this could be concerning for property owners who want or need to sell.
In a buyer’s market, flat price growth, higher stock levels, greater urgency among sellers, and a favourable bank lending environment, all combine to favour buyers, despite the higher interest rate.
So, while buyers are able to find good deals in the market and secure favourable rates on a mortgage loan, Samuel Seeff, chairman of the Seeff Property Group, says the challenge for sellers right now is how to sell in a buyer’s market.
One of the first things that happen in a buyer’s market, he explains, is that there are fewer buyers around to compete for the greater number of properties on offer. This usually means offers are slower to come in and, when they do, buyers tend to offer lower prices.
“In contrast, when the market favours sellers and there is a shortage of properties, sellers are usually able to find quite a few interested buyers and can generally bank on a favourable offer and price.”
Therefore, it is not so easy to sell in a buyer’s market when you really need to. The first thing to consider if you do have to sell is to avoid the temptation to overprice your property. The days of fast offers and high prices are now largely gone according to Seeff’s agents. Instead, the market is now dictating prices.
Furthermore, if you are selling right now, you may well be competing against three or four similar properties in your area or property category in the same price range. Thus, unless your property is offering something more than those competing properties, your chances of success may depend on your price. You therefore need to trust and listen to your agent.
“Be careful of agents who are just looking for your mandate. Rather work with an agent who can show their record of recent sales. Be open and upfront about your needs so that the agent can ensure no time is wasted to find a buyer for your property.”
You should also consider all offers, and remember than an offer often presents the opportunity to negotiate. So if each party gives a little, you might still be able to make a favourable deal, Seeff says. You should also consider that you may not get a higher offer.
You should also think about the time value of money.
“If you sell now, you may also be able to take advantage of the favourable buyer’s market conditions and find a better price for the new property that you wish to purchase. If you wait for a higher price, you may have to also pay a higher price.”
He adds: “Regardless of where we are in terms of the market cycle, there are always people looking to buy and therefore opportunities to sell. You therefore do not need to wait for the market to improve to sell, especially if you are looking to move or have your eye on another property.”
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