PropInsights: Real Estate Revelations

The real estate industry often changes, but one age-old question remains: do houses usually sell for the asking price? Cape Town real estate specialist Sandy Walsh, General Manager of Property.CoZa Prestige gives some strategic approaches for sellers who want to increase their chances of selling close to their asking price.

Whether your property is in coveted Cape Town or elsewhere in South Africa, if you’re selling your home, achieving the full asking price isn’t always guaranteed.

According to Sandy Walsh, real estate specialist and General Manager of Property.CoZa Prestige on the Atlantic Seaboard, it’s vital for property owners to understand the market influences if they are selling their property and want to achieve their asking price.

With industry trends suggesting that properties are spending less time on the market nationally, Walsh remarks the change is slow, from an average of 82 days in the last quarter of 2023 to an average of 81 days in January 2024.

She shares the view of financial institutions that stabilising the interest rate and expectations of further reductions this year should result in some recovery of the real estate market.

Walsh outlines three factors affecting a property’s full asking price attainability.

• Motivation to sell: Sellers with an urgency to sell may exhibit flexibility in pricing.
• Supply and demand: Market conditions are crucial in the property market. Buyers have more negotiation power in areas with high supply and low demand.
• Property condition: Well-maintained or recently renovated properties typically fetch closer to their asking prices. Buyers often associate necessary repairs with potential price negotiations.

She advises property sellers to be educated on factors influencing the real estate market. “Online research is a good starting point as it provides plenty of detail. For example, the FNB Property Barometer provides quarterly property market reviews,” she remarks.

Tips for Selling Success

In property, planning, being informed and having a focused strategy all enhance your selling success. Walsh recommends sellers consider these strategies to optimise their prospects of achieving their asking price:

Strategic pricing: In a seller’s market, it’s crucial to establish the trend of your competition and consider pricing slightly below market value to attract multiple offers, potentially driving up the final sale price.
“A Seller’s market is the other side of the market when fewer properties are available, and this heightens demand and generally enhances pricing,” comments Walsh.

Walsh comments that the demand for properties in the Western Cape, especially Cape Town, is high, and prices have risen in desirable suburbs in the Atlantic Seaboard.
“For example, Lightstone has found that properties in Sea Point have shown consistent price growth from 2021, with a small dip in 2022.”

Another example she cites is the median price growth on sectional title properties. From 2022 to 2023, it rose from R2 600 00 to R2 800 000, an almost 8% increase, with market signals showing further anticipated growth in 2024. Freehold properties are also on the rise.

Statistics provided from Lightstone

Proactive property maintenance: Address maintenance issues in advance to create a positive impression on potential buyers. A well-maintained property is more likely to command its asking price because it enhances its appeal and highlights the lifestyle benefits it offers.

Professional appraisal: Seek a reputable estate agent to assess your property and provide a Comparative Marketing Analysis (CMA) which uses market data to determine an impartial asking price.
“Real estate agents use market appraisal tools like Lightstone, which provide vital statistical data and detailed information to calculate a realistic listing price for sellers. An agent will also consider other factors, such as socio-economic conditions and competing market properties.

Compliance certificates and inspections: If you are serious about selling, obtaining compliance certificates and conducting inspections before you put your property on the market makes sense.
“Doing these important aspects progressively from the start of the process not only streamlines the negotiation process but also instils confidence in prospective buyers,” explains Walsh.

Capitalise on Marketing

Effective property marketing and listing techniques are essential for attracting the right buyers and maximising exposure. Walsh gives some pointers on how to achieve this:

• Stay informed: Monitor property listings in your area and adjust your pricing strategy accordingly to remain competitive. Browse property websites like CoZa and other portals to monitor properties in your area by simply searching the suburb. It’s also a good idea to visit some of the show houses in your area to get a sense of your competition.
• Showcase Unique Selling Points (USPs): Each property has unique features or attractions. Emphasising them in your marketing strategy, listing descriptions, and property photography helps to differentiate it from others in the market.
  “Work with your real estate agent to present your property at its best to the market. Photography and video footage should only be done when your property is looking at its best and may require some home staging to make it shine.
• Use professional expertise: Collaborate with an experienced real estate agent who knows the area and understands market dynamics. With this knowledge, an estate agent can leverage their networks to attract buyers, remarks Walsh.

Price Right from the Start

Walsh stresses that setting the right purchase price is crucial to selling success.
“It’s always tempting to hike the price on your property, but beware! Today, most buyers are well-informed and have access to data to research property prices. It’s not worth risking your property being overlooked in the market because of an unrealistic price.”

Avoid overpricing: Overpricing a property is a primary hurdle sellers face. Walsh points out that buyers determine the price by providing feedback on what they’d be prepared to pay for the property. Also, other real agents may use an overpriced house to showcase their well-priced property with similar features. “Remember that one of the best ways to attract potential buyers is to aim for an accurate and competitive asking price,” she adds.

Price psychology: Buyers tend to observe and adhere to specific price bands, especially if they are pre-qualified to finance a bond. “So, a pre-qualified buyer may look at properties up to R2 200 000 but will not consider properties priced over R2 200 000.”
She says adjusting the asking price slightly can influence buyer perceptions and attract more buyers. Walsh stresses that pricing your property accurately from the start is still vital to avoid negotiation hurdles later.

Walsh reminds sellers and buyers that informed decisions and strategic planning are essential to successful real estate transactions.

“By implementing these innovative selling strategies and understanding the dynamics of property pricing, sellers can increase their chances of selling easily and closer to their desired asking price,” she concludes.