There are now clear signs that the affordable housing market at the Cape (i.e. those homes selling between R500,000 and R750,000) has not only bottomed out but is actually on a recovery path. However price increases are slow at the moment and the more confident outlook should not encourage home sellers to start raising prices unrealistically.
This was said recently, at the Rawson Property Group’s annual conference held at the Arabella Hotel and Spa in Kleinmond, by Noelene Snyder, Rawson Properties franchisee for Kuils River and one of the longest serving and most successful franchisees in the Rawson Property Group.
“Throughout the recession period,” said Snyder, “we saw some sellers ‘testing’ the market with high prices and buyers almost always found themselves having to move on. By now I would have expected most people interested in property to realize that this tactic simply does not work. However, the fact remains that there are still sellers refusing to accept accurate market-related valuations compiled by agents with access to all the relevant data and vast experience in this type of work.”
This obstinacy, added Snyder, is always particularly frustrating in her franchise because, at any given time, she will have many qualified, willing buyers looking for properties and relying on her agents to introduce them to realistically priced units. We are currently in a "buyer’s market" and sellers should realise that agents sell houses, they do not set the price for them. The market dictates the price and all we can rely on is the current market analysis - and what a willing and able purchaser is prepared to pay a willing and able seller at a specific time.
At Kuils River, said Snyder, a home in the R500,000 to R800,000 bracket will usually sell within three to four weeks today, if it is priced realistically. In a typical month her five person team will sell around 10 to 15 homes. The Kuils River franchise covers the Eerste River area, where the average price of homes are between R350,000 and R500,00. The sellers in this area are more willing to grant sole mandates and therefore the homes move considerably faster here. Homes above the R1 million mark move slower, however it’s essential that we have homes available in this price range too.
Also frustrating, said Snyder, can be certain sellers’ inability (or reluctance) to see the advantages of sole mandates.
“It is surely,” she said, “not a coincidence that many of the Rawson Property Group’s top performers (for example, Andre Swart at Brackenfell Roslyn and John Weston at Bergvliet) will not operate on anything but a sole mandate – and we are almost always far more successful when we operate on this basis rather than on an open mandate.
“The argument in favour of open mandates,” said Snyder, “is that they introduce more competition to the market. However, when an agent knows he can be pre-empted by a rival just as he is about to conclude a deal and that he is not the only one negotiating prices with potential buyers, he is bound to feel less motivated. If these difficulties are not placed in his path, he will put in double or treble the effort and will generally achieve a better price for the seller, who, for his part, will also be relieved to have no ‘silly’ (i.e. merely curious) so-called potential buyers tramping through his home week after week.”
“The advantages of sole mandates, and incidentally for not cutting commissions,” said Snyder, “have, in my view, been proven time and again and along with accurate valuations, form the basis of most successful estate agency operations today.”
