Despite regularly published warnings in the property press from most of the major estate agencies, certain sellers are still trying to over-price their homes when they come up for sale, sometimes by ludicrous amounts, says Bill Rawson, Chairman of Rawson Properties.
The tendency, he added, is most obvious and most damaging at the top of the market where most homes did increase exponentially in value in 2004/2005 but where a levelling off in prices for some months now has been an established fact.
'Those adopting over-pricing strategies,' said Rawson, 'are in every case that I have come across basing their prices on inaccurate information such as trivial dinner table talk. There is absolutely no basis for the absurd prices certain sellers are still holding out for'
In the circumstances, said Rawson, it is not surprising to find that several top agents have recently walked away from mandates when the seller was asking too high a price.
In a recent case in the middle-market that came to his knowledge, said Rawson, the agent had refused to accept a mandate for a home priced (by the seller) at R2,5 million. Now the same home is still on the market - and still not selling, six months later - at a price below R2 million. The danger of a property staying on the market for so long, explains Rawson, is that the seller is selling and
buying in different markets.
'The property market looks different now to when the original process was put in motion in February. Prices for this type of property have decreased since February, which means that the seller has to use the diminished amount earned from the current propertys sale to buy a more expensive property bought in a strong February market'
'Agents,' said Rawson, 'are increasingly refusing to accept a too highly priced mandate and are right to do so because it is their money that is invested in the advertising and their time that is spent chasing unenthusiastic buyers. Furthermore, it is their reputation that is likely to be damaged by the frustrated owner when he finds that no sale materialises."