For most South Africans, property investment is one of the largest financial decisions they will make. With South Africa’s unique property market, characterised by regional variations and economic fluctuations, it’s essential to adopt a strategic approach to avoid overpaying and protect long-term investment value. Antonie Goosen, founder and principal of Meridian Realty, advises prospective buyers on assessing a property’s worth to ensure they’re paying a fair price.
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“An effective starting point is to compare similar properties in the target area to get a feel for price trends,” says Goosen. “Conducting a comparative market analysis involves looking at recent sale prices of comparable properties within the same neighbourhood. By establishing a benchmark, buyers can make well-informed offers that reflect realistic market conditions.” This research is particularly helpful in areas where property prices are volatile or seasonal. Observing trends over time enables buyers to recognise whether a property is fairly priced or overvalued.
Beyond neighbourhood comparisons, the physical condition of the property can dramatically impact its value. While a property may look pristine, it’s essential to evaluate any hidden structural issues or maintenance needs. “It’s crucial to inspect the property thoroughly and, if possible, hire a professional to assess its condition. The cost of repairs or upgrades should be considered when negotiating the final price,” Goosen explains. “Often, sellers may try to add value through aesthetic upgrades, but buyers need to look beyond these cosmetic changes to understand the true worth.” Factoring in these potential costs will ensure that buyers don’t face unexpected expenses post-purchase, which could otherwise compromise their investment.
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In an article published on 9 Oct 2023 Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, shared: “Buying a home is one of the biggest purchases a person can make, so you want to be sure to make the right choices throughout this process".
Here to help make this process a little easier, RE/MAX of Southern Africa shares their top three practical tips for house hunters:
1. Be open to compromising
No home is ever going to be 100% perfect. Being willing to compromise is essential – especially for first-time buyers who are still learning what their money will actually afford them within the current market. Compromise is also an important aspect for couples who have differing ideas on what the house needs to offer. Being able to agree on the essential must-haves versus want-to-haves in a home is a crucial first step before starting the house hunting process. Keep the list of must-have items short and realistic and be open to compromise on any item that falls under the ‘want-to-have’ list.
2. Give every home a fair chance
Making viewing appointments for multiple properties is a must for anyone who is house hunting. Not only will this help buyers narrow down their search criteria, but you might just be surprised by how much you like the property once you see it in person. It often takes walking through a home to realize the property’s full potential. Apart from this, considering multiple properties can help to avoid getting overly attached to one particular house – you can never be certain that your offer will be accepted, so it is a good idea to keep your options open.
3.Work with a real estate professional
Listing portals make house hunting much more accessible to buyers, but you are losing out on so much value if you fail to involve a real estate agent right from the very beginning. Not only will a real estate agent bring a wealth of local knowledge, real estate expertise, and negotiation skills to a transaction, but they are also likely to be privy to new listings before they even hit the market. The best part about this is that their services are completely free for buyers!
Embarking on the journey of finding the perfect home can be an exciting process, especially when you have the right support and guidance at your side. “From setting realistic search criteria to thoroughly exploring all options, the key to success lies in working with an experienced RE/MAX professional who can help you carefully plan and make informed decisions. Armed with these practical tips, your house hunting can become a stress-free, rewarding experience,” says Goslett.
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Engaging with an experienced estate agent who knows the local market can also offer a significant advantage, particularly for first-time or out-of-area buyers. “An agent familiar with the area can provide an accurate assessment of whether a property is priced fairly,” Goosen points out. “They can share valuable market data, assist in negotiations, and offer insights into the seller’s pricing strategy. A transparent agent who provides a detailed analysis of a property’s worth is invaluable to buyers looking for fair value.”
Current market conditions, including interest rates and economic outlooks, play a significant role in determining property prices and buyer leverage. Goosen explains that South Africa’s property market cycles between favouring buyers and sellers. “In a buyer’s market, prices tend to be more flexible, allowing buyers to negotiate effectively. In contrast, a seller’s market, often driven by demand, may see higher prices and fewer bargaining opportunities,” he adds. “Understanding the current market cycle can give buyers a strategic edge in determining when and how to approach negotiations.”
A disciplined, research-based approach is key to ensuring that buyers make sound investments that offer good value. By conducting a comparative analysis, confirming the property’s condition, working with knowledgeable agents, and staying attuned to market trends, buyers can enter negotiations with a clear understanding of what constitutes a fair price.
With these strategies, buyers can approach the South African property market with confidence and ensure that the price they pay aligns with the property’s actual worth, safeguarding their investment for the future.
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