One of the challenges facing the property industry at the moment is sellers that have held onto their prices thinking that the down part of the property price cycle would be shorter.
Sellers expected that the market would have corrected by 2010, which did not happen and are now sitting with properties on the market for over 200 days.
Property economist Francois Viruly says that sellers are aiming at least 15% to high and that the difference between asking and selling price is narrowing, though still having an 8% variance at the moment.
He also says that a readjustment needs to take place and that market prices are on the decline, but not at the same rate across South Africa.
The Cape Town market is known for being more volatile than that of Johannesburg, Cape Town adjusting quicker than Johannesburg.
The primary residence sellers are under less pressure than the buy-to-let sellers, though primary residence sellers do not want to see their primary asset lose value.
FNB home loans property strategist John Loos says that the current situation of houses sitting on the market for nearly four months is too long.
The FNB Estate Agent Survey estimated the average time on market at 15 weeks and on day, along with 87% of the sellers having to reduce their asking price.
The benchmark for realistically prices properties seems to be 2 months, based upon when the market was healthy.
John Loos says that the average variance between asking and selling price is between 10 to 12%.
Having a Comparative Market analysis prepared on your property will enable you to price your property correctly against the competing properties in the market.
This takes into consideration many factors that you as an owner may not take into account when determining your asking price, such as relative state of the property, adjustments for size and accommodation, location etc.
Pricing your property correctly when putting it on the market is crucial to ensure the best possible attention is generated.
The 1st offer received on an overpriced property has been seen as being the best offer on that property, which is usually rejected by the sellers, with lower offers being accepted later on due to lack of interest in the property at that time.
If you are thinking of selling your property and have a selling price in mind, ask yourself whether you would purchase your property for the selling price that you have in mind.
