Answering questions from a member of the property press recently, Bill Rawson, Chairman of the Rawson Property Group, said that estate agents will always be called on to meet challenges and these challenges inevitably will change roughly every five to ten years.
Right now, he said, the big challenge encountered, particularly in the high density urban and suburban areas, is, firstly, to garner enough stock.
“In less than three years the more popular areas have seen a remarkable swing from a stock oversupply to a stock shortage position,” said Rawson. “Today’s truly successful agent will always be in areas such as, in the Cape Town suburbs, Rondebosch, Newlands, Claremont or Kenilworth, and will be the one who devotes anything up to 30 to 40% of his time to canvassing for new stock. This is an exhausting process which frequently entails also giving a property valuation – one of the many services for which agents are not remunerated.”
The second big challenge, said Rawson, is to convince sellers to price accurately.
“Throughout the 2009 to 2011 downturn, sellers kept referring back to the peak prices of 2004 to 2008 and refusing to accept that, if they genuinely want to sell, some sort of price cut would be essential.”
“Now we are in a seller’s market characterised by stock shortages and although there is much realism about, sellers are once again beginning to be far too optimistic.”
Rawson said that it takes a really good agent to convince such a seller to accept a realistic offer and to go for a quick, satisfactory deal rather than to hang in there to everyone’s frustration month after month, achieving no sale at all.
The third challenge, said Rawson, is the shortage of bond finance. In the less affluent areas in particular, but by no means only in such areas, as many as 50% to 60% of all bond applications can be rejected, and this statement is exacerbated if the buyer is not counselled by a good agent.
To prevent this, the agent should recommend a reputable bond originator to the buyer who will perform a careful analysis of his income, expenditure and debts which will assist the buyer in becoming pre-qualified for a bond. If this process is not meticulously carried out, he said, it is quite likely that some small glitch will result in the bond being rejected, even when, in fact, the buyer is a viable proposition.
This whole process, he said, requires patience, tact, skill and perseverance.
“Those who indulge in criticising the high commissions that some estate agents charge forget just how much of this back-up and back room work has to be carried out before a successful sale materialises,’ said Rawson.
