Consequently, says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), homebuyers really need to do their homework before making an aggressively low offer.
For example, buyers should try to establish how motivated the sellers are to make a deal. It could be that they have already bought another home and are worried about paying two bonds, or that they are relocating for a job in another town, or simply that the property has been on the market a long time.
"When making an aggressive offer, there is always the danger of going too low and insulting the sellers to the point where they simply refuse to have anything more to do with you, so if you are actually serious about buying the property you should also be able to justify your offer with independent information."
These hard facts might include an estimate of the current amount of stock for sale in the area and the expected rate at which that stock will be absorbed. For example, if the buyers have counted more than 20 homes for sale, but established that only 10 homes in the area have sold in the past year, they could point out that the sellers might have to wait up to two years for another offer.
However, even when confronted with strong evidence, sellers may fail to respond positively to a low offer, and buyers should be prepared for this. "Despite slower sales, sellers know that prices are not actually falling at the moment and some will simply hold out as long as necessary to get what they want," says Marais.
On the other hand, buyers who have made a low offer should be prepared to negotiate. Some sellers will not see the offer as an insult but as a sign of interest and a signal to open a dialogue, with offers and counter-offers going back and forth several times.
"What is more, all is not lost if a seller doesn't 'bite' immediately. Sometimes a seller will come around after a few weeks or months have passed with no sale, and sometimes new information, such as the sale of a similar property at a lower-than-expected price, will prompt a second look at an offer initially considered too low."
For more information contact 021 531 2074 or click here to visit the website.
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