Many home sellers, despite ongoing warnings from estate agencies on this subject, are still overvaluing their homes.
Sellers interviewing agents on the hunt for sole mandates, says Steward, should insist that the agent justifies his valuation by producing figures of recent sales of similar properties in the area. Do your own check by getting an online property valuation.
This is according to Lanice Steward, Managing Director of Anne Porter Knight Frank, who says when analysing the Propstats’ figures for the majority of Cape Peninsula suburbs, this would be the conclusion property trend watchers would be led to.
Taking as an example the Hout Bay/Llandudno area in which APKF is particularly active, Steward says that in the last three years prices have remained more or less static - the current average price for Hout Bay being ± R2 760 000. However, she explains, the average time taken to sell a home increased in that three year period from 128 days in 2009 to 155 days in 2011.
“This indicates that some sellers are still not accepting that price increases are no longer the norm and that realistic prices are now at roughly 2007 levels.”
It is this, not a lack of demand, she says, that is the main reason for properties staying on the market for such long periods.
Although APKF agents are forbidden by the company’s code of ethics from overvaluing, some agents, says Steward, are still doing this to obtain mandates.
Sellers interviewing agents on the hunt for sole mandates, says Steward, should insist that the agent justifies his valuation by producing figures of recent sales of similar properties in the area.
They should also be asked to reveal the differences between asking and achieved prices on their last half dozen sales. If these are over the area average, there is, she says, definitely room for suspicion.
Similarly, if the times taken to sell homes are above average, that too is an indicator not only of incompetence but also possibly of the methods they have used to obtain to mandates.
If an agent cannot produce such figures, advises Steward, that in itself is a sure indication that he or she lacks professionalism.
“Those who do succumb to the overvaluing syndrome will in nine cases out of ten find their selling experience traumatic. “
She says it is never pleasant to have curious strangers traipsing through your home and garden and if this goes on for months on end it can reduce sellers to a state of despair.
“Sellers must take the bull by the horns, obtain realistic valuations and not be fooled by mandate hungry agents prepared to compromise their integrity in order to get mandates,” says Steward.
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