The latest RE/MAX survey, which was conducted in May among the country’s leading RE/MAX offices, shows that most homes which were sold by RE/MAX agents around the country between 1 January and 30 April 2012 had a minimal difference between asking and selling price of between 7% and 11%.
Survey respondents also indicated that homes priced between R500 000 and R1million spent an average of 84 days on the market before selling. Those properties prices in the R1million to R2million range spent an average of 105 days on the market before selling, while those homes with higher price tags of R2million and more spent an average of 136 days on the market before selling.
One could attribute these findings to less stock, more demand and sellers pricing correctly, which indicates the emergence of a change in market conditions from a buyer’s market to a seller’s one. As stock decreases and demand increases, so buyers will be more prepared to pay closer to the asking price of a property, as long as the asking prices remain reasonable and market-related. As stock levels decrease, those homes on the market will sell faster.
The survey results clearly indicate that setting the right price for a home will remain essential to a successful sale. According to the survey results, even the most expensive properties priced from R2million upwards took less than 20 weeks to sell, and they only had a difference between asking and actual selling price of 11,69%, on average.
The survey results show that properties priced between R500 000 and R1million had an average difference between asking and selling price of around 7%, while those priced between R1million and R2million had a 9,62% difference between asking and selling price, on average.
Less than 10% of sellers had an outstanding home loan balance that was higher than the value the property was sold for, according to 84% of survey respondents. While market conditions may well be changing, distressed properties will still be a market reality for the foreseeable future. RE/MAX agents who have been marketing distressed properties have managed to achieve, on average, 91% of the asking price with these properties spending an average of 45 days on the market before selling.
It is interesting to note that only 20% of sellers between 1 January 2012 and 30 April 2012 were selling their properties due to affordability reasons, according to survey respondents. Almost 30% of sellers, on average, were selling because they were relocating, with 20% downsizing and a further 25% selling to upgrade to a bigger or better property for their needs, according to the survey results.
One of the most detrimental mistakes that so many sellers make when putting their home on the market is overpricing the property. Often sellers set a higher price for their property than what they want to get out, with the hope that if a buyer offers a lower price, they are still able to negotiate close to the original price they wanted. This will definitely hinder a successful sale resulting in the property sitting on the market for longer, and probably selling at a lower price than the seller would have wanted to achieve in the first place.