SELLERS MARKET OR BUYERS MARKET?
Category General News
In the light of the country’s current uncertainties around strong leadership and blurred economics – together with the global high-jumps - Myles Wakefield, CEO of Wakefields Real Estate, offers a reality check to both buyers and sellers
No matter what is being said, if you look around you, people are still buying and selling properties. Perhaps you’re one of them. This is not to imply that South Africans are burying their heads in the sand about the local and global rollercoaster on which we find ourselves, but rather, are carrying out life plans for a home, a family, a retirement, a life here and now. For the majority, this is where we want to be, and we’re going to do whatever it takes to make it work.
But we’re more cautious.
Realistically, with junk status conferred on us, life is likely to become more expensive, so for those homeowners or, indeed, want-to-be homeowners, this hiatus in the country’s time line is a good opportunity for self-examination…and a very close look at your finances. The home loan interest rate is likely to rise to a greater or lesser extent, and this undoubtedly affects both buyers and sellers.
For the property market to work for you, you need to look at the broader picture.
As a seller, of course you want the top price for your home. Who wouldn’t? But your ‘top price’ needs not only to be a realistic market-related assessment, but it can’t be determined in a vacuum. It needs to be arrived at in the current climate, and that includes everything from the attitude of buyers who are just as affected by the economy, who are also apprehensive about overextending themselves and the potential devaluation of their investments, retirement funds and so on.
If you need to sell now, you need to make the price realistic and attractive.
For homeowners heavily exposed to debt, you need to take remedial action sooner rather than later. Depending on your circumstances, you may have alternative ways to reduce your overheads and expenditure to remove pressure on yourself and your home. But if you don’t have a plan B, let those who work daily in the property profession in your area, advise you on a price you can achieve right now. Get a valuation. Or three. You might not like the figure that’s given to you, but weigh it up. You don’t want – or can’t afford for - your property to sit on the market for long. Nor do you want to be repeatedly reducing your price. These all weaken your case. Get it right first time…or as best you can. A professional opinion as to your house’s value is based on a host of factors…and a heap of experience. You can’t afford not to listen.
Harsh as it sounds, as a serious seller, you need to accept that buyers will not pay that extra R100 000 because you need it or would like it.
Those who will be most affected by the country’s status downgrade, are first-time homeowners, that sector of the market who are most in need and should have been given the most assistance. Banks want ‘quality’ clients, and that means they want those with high(er) deposits, and a solid, quantitative assurance that they can repay their loans.
For first time homeowners applying for a bond, it’s imperative to have a good-sized deposit. The likelihood of banks granting 100 percent bonds is remote.
Indeed, for any homeowners applying for bonds, concessionary home loan rates will be the exception. It will be more difficult for most prospective homeowners to get favourable interest rates. The banks will not be able to afford to give as much leeway as they are presently giving.
If you find a home you want and can afford, don’t think ‘it’s tough times, I’ll make a crazy offer.’ That’s how so many lose the home of their dreams. Just as the seller needs to be sensitive to the market, so too, do you.
IN A NUTSHELL
In times like these, property swings more to a buyer’s market than a seller’s…and that’s happening now. The pendulum is swinging. So, both buyers and sellers need to be realistic, and take on board advice from those in the know.
Author: Anne Schauffer