FNB’s latest Property Barometer Data (July 2024) indicates that the average time a home spent on the market in Q2 ’24 was 12 weeks and two-days – up from 10 weeks and six-days in Q1 ’24. With the increase in the time it takes to sell a home, Grant Smee, Managing Director of Only Realty Property Group, provides key factors for sellers to consider.
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A home is one of the biggest investments that you will make in your lifetime so when it comes time to sell, it’s imperative that you set yourself up for success.
“Making informed decisions early in the process can be the difference between profiting from the sale of your home or potentially facing a failed transaction,” says Smee.
He adds that sellers are up against a host of uncontrollable factors and therefore it’s important to ‘control the controllables’.
“A prolonged buyers’ market, increased financial pressures, and a high-interest rate environment could impact on the sale of your home,” he says. “It’s vital that you take the necessary steps required to give yourself the best chance to succeed – regardless of where you are in the home selling journey.”
For those with property listings of six-months plus that aren’t selling and are yielding little to no interest, Smee cautions that while the aesthetic updates are easier to overcome, some sellers tend to overlook the intrinsically linked, vitally important factors that go into a successful sale.
Four key factors to keep in mind
If the price is right
“The sale of a home almost always comes down to price – particularly in a buyer’s market,” comments Smee.
“When it comes time to set the price, make sure that it’s market related. Remember, that buyers will almost always (except in a case where there are multiple offers) try to offer a lower price, so be sure to take this into account. Clearly communicate your lowest price to your agent so that they know upfront and can work with the potential buyer to negotiate.”
He adds that it’s important to factor in additional costs such as levies, which can sometimes hamper a sale.
“We are seeing many properties with levies upwards of R5,000 per month and while these are imperative to the upkeep of the property, they can also be viewed as a further cost by buyers. Chat to your agent to make sure that they have a clear point-of-view and a strong argument for this.”
Know your ‘why’
“Selling a home can be an emotional process but where possible, I strongly advise you to take the emotion out of it,” says Smee. “There’s a clear difference between selling because you must and selling because you want to.”
If a home is sentimental and you simply cannot part with it for a lesser price, then clearly communicate this with your agent and be prepared to wait for the right buyer at the right time.
“If, on the other hand, you are determined to sell because of financial pressures, downscaling, upscaling or even emigrating, then you may be more willing to negotiate further.”
When opting to hold on and decline lower offers, one should weigh up holding out for a better price and the costs associated with monthly repayments, levies and maintenance in the interim.
“Another option may be to consider getting a good tenant in the meantime to cover your expenses – particularly given the robust state of the rental market at present.”
Know your buyer pool
“While a great agent has a clear understanding of the market and will offer you all the data that you need, it’s important that you too are clued up,” says Smee.
Take time to properly research the area, talk to people around you, see what homes are selling, what their specs are, what they are listed for and what their clear points of differentiation are from your home.
He recommends that sellers should not only consider what they are up against in terms of properties for sale but also rentals. “The rental market is buoyant, and some potential buyers may want to rent for the time being until the interest rates begin to drop.”
“Finally, put yourself in the shoes of a potential buyer and remember all the things that stood out to you about the home in the first place – perhaps it’s close to schools, has a home office or it’s in a secure complex. Be sure that these USPs are clearly communicated,” he says.
Work with your agent to determine what may work best. “If show houses aren’t working, then communicate with your agent so that you can come up with a better plan together. Perhaps it’s a virtual tour, one-on-one appointments, cold calling or less frequent show houses.”
The right agent is everything
“Cliché but true, the right agent will be focused on your property and will dedicate a lot of time and effort your sale. So often we see disgruntled sellers complaining about previous agents and being locked into sole mandates with agents who are either inundated or underperforming.”
To avoid this, it’s vital to do one’s homework prior to signing an agreement. “Meet with various agents and prepare a Q&A to determine how they would best market the property and what differentiates them from the rest. It’s all about finding your fit.”
Smee adds that the right agent will know the right buyers and have a clear understanding of the market. “If something isn’t working, they will come up with another solution.”
“Take your time when finding an agent as this could make or break your sale.”
The market at present
Looking to the reasons for slow sales in some parts of the country, Smee points to FNB’s latest Property Barometer Data which shows that the average time that a home spent on the market in Q2 ’24 was 12 weeks and two-days.
“While the Western Cape continues to outpace the rest, properties are still selling below their asking price,” says Smee, pointing to Property24 data that highlights an average selling price of R1.61 million versus an average asking price of R2.3 million in 2024.
Another key factor to consider is surplus stock. “In Johannesburg for instance, 2,663 new listings in Johannesburg came to market in August but there are in fact an additional 17,000 existing listings that you may or may not be competing against (Property24 data).”
When asked what the ‘sweet spot’ for selling is, Smee points to the data. “According to the latest FNB Property Barometer, the majority of estate agents rated the price brackets of R250,000 – R750,000 an average of 7.5 out of 10. However, if you aren’t in this price bracket, don’t lose hope; the market is turning and improving.”
Don’t lose hope – the market is turning
“While majority of the country is experiencing a buyer’s market, select nodes are in fact experiencing a sellers’ boom.”
The resilient luxury property bracket of R3.6 million-plus remains seemingly immune to financial and economic pressures, with homes north of R20 million in short supply. “Sellers have the upper hand in select parts of Cape Town such as Clifton, Constantia Upper and parts of the winelands such as Paarl, home to the sought-after Val de Vie Estate where property is hard to come by.”
In addition, Smee points to an improved outlook spurred on by an imminent interest rate cut, the lowest petrol and diesel prices seen since the first half of 2023, a deacceleration in headline consumer inflation and a subsequent rebound in national house price inflation (+4.7% in July 2024).
“These factors will aid homebuying – particularly in the first-time homebuyers’ segment and bring much relief to sellers.”
Smee urges those struggling with the sale of their home not to lose hope. “Be positive, avoid knee-jerk decisions and be proactive. Remember, it’s all about the right buyer at the right time and that the market is set to take a positive turn” he concludes.