Although it sounds a little ridiculous, there are some sellers out there who treat the sale of their home like a game of Russian roulette. Even those who are serious about selling and fully understand that they have to sell within a certain timeframe have been known to ignore their agent’s advice and try to sell their property at a higher than recommended price. Adopting a ‘let’s see what happens’ approach, sellers, it seems, do not appear to understand that they stand to lose in the long run.
Statistics indicate that a property sold within a month of coming onto the market, is generally sold for the full asking price; this, of course, if the home is in good condition and was priced correctly to begin with. On the other hand, properties that stay on the market for between 5 and 12 weeks, generally sell for three percent less, while those on the market for between 13 and 24 weeks will sell for approximately six percent less. It gets worse. Houses that have been in the marketplace for 24 weeks or more are generally expected to sell for up to 10 percent less than the original asking price.
You would think that the more desperate a seller is to sell, the more realistic he would become, but sadly, this doesn’t appear to be the case. Ask any agent and they will tell you that a large percentage of property on their books is overpriced. While it is understandable that some sellers simply can’t afford to sell for less because they paid a premium for the property during the boom, there are also those who are stuck in ‘boom mode’ and cannot accept that although they may well have achieved their price during the upswing, they have little or no change of doing so now that conditions have changed.
Property has never been regarded as a short term investment and although there are investors who make a great deal of money out of this commodity, it very seldom happens overnight. It seems that while we often hear about those who made a mint and set themselves up for life by buying and selling property, we seldom, if ever, hear about those who took a gamble and failed.
The tragedy of the situation is that this happens far more often than we realise. There is a great deal of money to be made if you buy and sell at the right time. Unfortunately, if you invest at the wrong time or perhaps, more importantly, try to sell at the wrong time, you stand an excellent chance of being on the losing end of the deal.
Your average homebuyer is not an investor and does not expect to make a killing when he sells the home that he has been living in for the past three years. However, if, like so many other South Africans, he bought his home at the height of the boom when prices were at their peak, he may now struggle to sell the home for what he deems a suitable profit.
It’s not all doom and gloom out there and generally speaking, house prices are on the rise. However, sellers still have to be reasonable and understand that there are a lot of other sellers out there who are as keen as them to sell. Price it right and reap the benefits, or overprice it and risk endless frustration – you choose.