Just about everyone knows now what happens when a home for sale is overpriced, but no one wants to think that it could happen to them.
“However, the latest statistics from FNB indicate that at least eight out of 10 home sellers are at risk, unless they are brave enough to acknowledge the problem and take quick action to fix it,” says David Jacobs, northern regions manager for the Rawson Property Group.
“In fact, the FNB Property Barometer figures show that 88% of home sellers currently are having to drop their asking prices in order to get their properties sold, and that the average drop is 7%.”
What is more, he says the average time taken to sell a property after it has been listed has risen from 78 days earlier last year to 98 days now, which implies that many sellers are currently putting themselves through almost three more weeks of anxiety before finally reaching the inevitable conclusion that they must either drop their price or take their home off the market because it is not attracting offers.
“And sadly, their indecision is likely to cost them considerably more than 7% of their original asking price, just in holding costs – those additional bond repayments, rates, utility bills and insurance premiums that they are having to pay while their home remains unsold,” says Jacobs.
Consequently, he says sellers who want to make the most of the sales season are advised to seek the advice of a reputable, experienced local agent familiar with current market conditions in your particular area.
“If that is the likely outcome – and the FNB figures show that it is – why not just make the move right away and get ahead of the other home sellers who are competing for your buyer’s attention?” asks Jacobs.
“Our experience is that sellers who follow this course are likely to achieve a sale in less than half the average time, and are likely to enjoy savings on holding costs that go a long way towards compensating them for a lower selling price.”
In addition, he says while their ‘competitors’ are spending weeks trying to market their higher-priced properties to prospective buyers who very likely know the market better than they themselves do – and are determined to pay less, these realistic sellers are free to move on and negotiate for their next properties with cash in their hands, which often means even more savings for them.
Meanwhile, Jacobs says those whose homes have already been on the market for some time without attracting an offer need to start asking themselves a few tough questions.
“For example, you may need to consider your motivation. If you are really only intending to sell if you get a certain price, and that price is not currently attainable, you are not what the industry calls a ‘serious seller’, and you would probably be best advised to take your home off the market rather than letting it become shop soiled in the eyes of potential buyers,” he says.
“On the other hand, if you are highly motivated to sell as soon as possible, you need to ask yourself if you are prepared to put sentiment about your home aside and do whatever it takes to achieve a sale.”
According to Jacobs, this is necessary because while the number-one reason for a home not selling is the price, a simple price reduction is often not enough if the property has been on the market for several weeks and those people who were likely buyers have already lost interest and moved on.
To start with, he says you will need to talk to your agent about a fresh marketing initiative, perhaps more or different advertising and some more show days.
Then you should think about incentivising prospective buyers by including all the appliances or curtains in the purchase price, for example, or maybe offering furniture, décor or hardware gift cards up to a certain value.
“Additionally, you should ask friends or your agent to take an unbiased look at your home and suggest what cosmetic improvements or decluttering or staging would increase its ‘curb appeal’,” says Jacobs.
“This is not the time for major renovations, but it is also not the time to give up on weeding the flowerbeds, washing the windows, shining up the bathroom and tidying the kitchen counters. Whatever the price of your home, prospective buyers will like it better and be more inclined to make an offer if it is fresh and clean and ready to move into.”
Then, finally, Jacob says you should start assembling all the documents you will need for the property to be transferred without delay, such as your latest municipal account, a copy of the title deed, the electrical and plumbing compliance certificates, and a gas certificate if applicable, as well as an approved plan of the property and any guarantees for recent maintenance or repair work such as painting or waterproofing.