SELLING DURING AN ECONOMIC DOWNTURN...
PUBLISHED 23 AUG 2018
Selling property during an economic downturn, pose serious challenges. This article offers insight into how sellers can protect themselves from feeling pressured into accepting unreasonably low offers, regardless of tough economic times.
- Obtain a professional opinion on the market value of your property BEFORE putting it up for sale. This can be done by an Estate Agent who specialises in your area. The Estate Agent should be knowledgable in all aspects relating to the area, including value of recent sales; age, condition and accommodation offered by each comparable property; asking price and time spent on the market; potential for further development in the area; etc. Use the value range proposed by the Estate Agent to reach a decision about when an offer would not be fair. Do not take a decision based on fear of losing a deal.
- Only work with Estate Agents who have a solid reputation IN YOUR AREA. Appointing an Estate Agent based on his success in another, non-comparable area, is a mistake many sellers make. Sellers often appoint an Estate Agent based on friendship; personal experience when buying or selling through that Estate Agent in another area; or based on referral by a friend who bought and sold in another area. Bear in mind that being successful in one specific residential area, means that that Estate Agent knows the market and potential buyers in that area - not necessarily in your area. Find the Estate Agent who has stuck to your area, regardless of tough economic times; a slump in the property market or decline in sales in your area. That is the Estate Agent who will be able to commit to the marketing of your property, no matter what. This is also the Estate Agent who will not pressure you into accepting an unreasonably low offer just to conclude the deal.
- Evaluate all conditions of the offer.
- Price alone does not make a fair/unfair offer. Consider all conditions of the offer, i.e. does the buyer offer cash or will the purchase be subject to the sale of a property, or bond approval.
An offer subject to the sale of a property, is the least favorable, especially in a slow market. To counter the uncertainty of such an offer, it is advisable to include a 72-hour clause in the contract. That way, marketing may continue in search of an offer with better conditions and maybe even a higher price.
Offers subject to bond approval, although still uncertain, are more easily accepted by sellers, especially if the buyer has been pre-qualified by his bank. Inclusion of a 72-hour clause is still advisable.
Cash offers is what sellers' dreams are made of - but beware! Cash may be tied up in an investment which requires a specified notice period that might not be convenient for the seller; cash might be from the sale of another property yet to be registered, etc. Obtain details of exactly where the cash will come from and when it will be available. Ensure that guarantees on such cash can be delivered within a short period of time and write these conditions into the contract.
- Date of occupation is often a bone of contention. Negotiate a date of occupation that will suit all parties. Always ensure that the date of occupation is scheduled after guarantees have been delivered. Ensure that occupation rental is written into the contract (even if parties agree to occupation on date of registration - circumstances such as delays in the registration process may force either party to occupy the property when owned by the other party.)
- Consider the time implications that follow each purchase condition - cash offers or pre-approved bonds might ensure a quick sale, making such offers more appealing than a higher price offer that will take longer to register.
Follow the above guidelines to make an informed decision about the fairness of an offer. The importance of proper price counselling prior to putting a property on the market, can not be over emphasised. A professional comparative market analysis not only serves to provide a picture of the prevailing market, but also to guide sellers' decision making on whether or not to accept lower offers. It also serves as confirmation to buyers that the property they wish to purchase is indeed priced according to the market.
Contact Retha van Zyl on firstname.lastname@example.org for guidance on pricing your Woodland Hills property to sell in tough economic times.