No one so blind as the home seller who cannot face market realities, says Anne Porter Knight Frank MD

The facts that slow trading conditions have prevailed in the residential property market over the last two and a half years, and that prices, although now stable, have not as yet shown any marked tendency to rise, still have not penetrated into the thinking of certain home sellers, says Lanice Steward, MD of the Cape estate agency, Anne Porter Knight Frank – and this continues to lead to overpricing of homes.

“Two systems of valuing property run side by side,” said Steward. “In the first system, realistic market-related factors – and nothing else – are taken into account. With this system an estimated value based on such hard facts as what similar houses in the area are selling for and the state of the property now being brought to the market is worked out. Emotion and wishful thinking play no part in such decisions – and the owner who accepts such estimates almost always sells within a reasonable time.

“In the second system, if it can be called a system,” said Steward, “the sellers will have an inflated price in their minds – and will only listen to and appoint an agent who roughly agrees with them.”

In this scenario, a few months later, when no sale has been made, the seller will either dismiss the agent or agree to a price drop. Often the agent will be belittled in the process.

A good agent, said Steward, will at the outset produce a well researched comparative market analysis which will show accurately what the house is worth. Before awarding the mandate, however, the owners should do their own research: they should study newspaper advertisements and talk to other non-involved agents about current price levels. These will often give a different figure to the one proposed by an agent seeking a mandate.

Some stubborn or patient sellers, said Steward, will hold out for a year or longer to get a price that is eventually nearer their own estimate.

“What they tend to forget, of course, is that in the year that has passed, they have had to pay out another year’s rates and taxes, another year’s bond repayments and another year’s maintenance. These should have added at least 5% to their price. It is also more than likely that if they selling to buy elsewhere, the prices there may have firmed in the interim and they will pay higher than if they had bought a year earlier. The plain truth is that here is no one so blind as a self deluded home seller who ignores market conditions.”

For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.

Posted by: Anne Porter Knight Frank