'Nothing,' says Bill Rawson, Chairman of Rawson Properties (which with 130 plus franchises is now the fastest growing estate agency network in SA), 'causes more controversy in the residential home market than the question of the price at which a home should be brought to the market'
After deciding to sell, the seller, says Rawson, obviously has to rely largely on the agents advice '“ but how does he know if the agents estimate is correct?
Rawson says that shrewd sellers will always insist that the agent produces a complete up-to-date market report on how other, similar properties in the area have recently sold. 'If he cannot do this you know at once that he is an amateur,' said Rawson. The seller will then 'if he is wise' inspect the homes sold himself and assess how they compare with his.
Equally important, says Rawson, he will check the agents recent track record. 'There are,' says Rawson, 'two questions to be asked here and they are both crucial: firstly, how many properties has the agent sold recently and secondly how close to the asking price were the final sales figures. 'It is still amazing to me how few sellers carry out this rudimentary check.
'Certain agents,' added Rawson, 'attempt to gain mandates by suggesting unrealistically high sales prices and then later talk the seller into accepting a smaller offer because 'the market has taken a downturn'.
In the current 'tighter' market, said Rawson, most sellers are settling for an 8% differential between the selling price and the asking price. However, there are still cases where a property with exceptional features, or properties in growth areas, will achieve prices higher than the asking price.
Asked to explain the phrase 'tighter conditions' Rawson said that this year unit sales in the Western Cape have dropped by four percent. Elsewhere in the country, the figure appears to be around 10%. 'But this,' he said, 'is merely a correction in market activity, following the boom of 2004 - 2005. 'Although in certain of the more affluent areas price rises have recently been lower than in the lower-middle-class and affordable brackets, where increases of 10% to 15% is still recorded, especially on new developments, value rises generally continue to be highly satisfactory '“ and so far show little or no signs of being influenced by the rise in interest rates'
Western Cape residential property, added Rawson, has been by far the best performer in South Africa. Average sale prices here, he said, are now R1,2 million which is almost double the SA average. 'What is more,' he said, 'every market survey that we have undertaken at Rawson Properties has indicated that confidence in Cape property continues to be very, very strong'
