Fairly priced houses selling fast

The latest FNB Residential Property Review reveals that only 12% of South African houses put up for sale recently have achieved the full asking price and the average accepted discount on the list price is now 7%.  The report also reveals that the average selling time has now increased from 78 to 98 days.

“Despite rather negative press reaction to these and similar figures, the situation is in fact not at all discouraging,” says Rowan Alexander, Director of Alexander Property.  “The FNB figures are indicative of a market that is still reasonably buoyant, especially in the Western Cape, but they do show that home buyers are now under more financial stress than they have been for several years.”

Figures such as those quoted, adds Alexander, sometimes lead buyers to think that they now have more options and that their negotiating position has greatly improved.  This, however, is not the case:  it applies only when the home is very obviously overpriced and it is less likely to be applicable in the Western Cape residential market which is still outperforming that of all other provinces.

“Alexander Swart Property has in the last ten days sold three homes within 24 hours of their being listed and the reason for this was that our valuations were spot on, exactly what the market is currently able to pay.  As I have said before, buyers today are sophisticated and well informed and can recognize a fair price.  Buyers looking for a home should not start to get the impression that they can by bargaining reduce a fair price to one which is in fact unfair.”

Home sellers who overprice, for their part, says Alexander, have two choices:  they can either resign themselves to a lengthy wait until a buyer prepared too high finally materializes – and this choice is very often leads to disappointment – or they can get realistic and accept a 5% to 7% drop in their list price, which will probably bring about the sale they want.  On a R2 million home, Alexander points out, the bond interest of R17,000 per month is substantial, but with a quick sale this could result in a substantial saving on the bond payments which might otherwise might have to continue for six to 12 months.  This in itself should be an inducement to sellers to accepting good valuations on the advice of a reputable agent who has their best interests at heart.