It's all about value now

The focus of the South African residential property market has shifted, says Meyer. “After years when property was in such high demand that sellers could almost name their price, we’ve entered a tougher, more realistic phase where true value is governing market behaviour,” he says. “It’s no longer about perceived value in the face of unstinting demand, it’s about good value for money.

“If a property is incorrectly priced in this market, it will not sell, and will become tainted after being advertised for months on end. Perceptions that there is something wrong with the property – apart from its inappropriate price – is one of the most dangerous things that can happen in a market like this, where buyers are looking for real value for money – and they have the choice to seek it out.

“On average, a professional agent will negotiate with a seller for seven hours, but he will be involved in negotiation process with a buyer for up to 32 hours. A home owner is neither equipped or experienced enough to handle this phase in the context of a private sale. With their emotional attachment to the property, their lack of objectivity is likely to compromise the success of the deal even further.

“Together, these factors mean that alternate methods of selling a property – privately or by auction – are the worst choices a seller can make right now. On the face of it, the deal might cost them less, or nothing, in agents’ commission, or they might grasp at the thought of having a definite sale date where a minimum price is achievable. These are false hopes in the present market.

“Apart from their skills at valuing a property, an experienced estate agent has the contacts and knowledge to match an appropriate buyer with a property, and is skilled in negotiating with buyers – often the most difficult part of the process. Engel & Völkers’ agents also have the support of an experienced legal team that facilitates every step of the process – many of which a private seller would be unaware.

“As far as auctions go, there’s a very definite perception that residential properties on auction are the ones that nobody wanted, and while you may set a reserve price for the day of the event, there’s still no guarantee that you’ll achieve it. Having a residential property fail on auction is even more damaging than a failure in the mainstream market would be, and the only option then would be to take it off the market for several months, and re-approach several months later. Auctions are also limited to potential buyers who can attend on the day, excluding the national or overseas buyers to which an estate agent has access. There’s no opportunity for negotiation over matters such as occupation and minor repairs – another factor that excludes a number of potential buyers.”

The boom years certainly led to the coining of the phrase ‘playing the property market’ – but it’s no longer a game, Meyer concludes. “Property has evolved into a serious business, and all parties involved need to approach it with a business-like, professional view. There are no easy ways out, there are no cheap options. The importance of engaging the services of an experienced, trained, and knowledgeable estate agent with an objective view of every transaction can simply not be underestimated.”

About Engel & Völkers

Engel & Völkers, established in Hamburg nearly 30 years ago, has flourished in the highly competitive South African environment. With a world recognised shop concept, Engel & Völkers is visibly placed in the best locations nationwide and the shops are designed to reflect the company’s commitment to quality.

The company attributes its overwhelming success to the high levels of industry expertise offered by its property specialists. This is further enhanced by Engel & Völkers’ comprehensive GO! (Global Office) computer system, which is a worldwide customer relationship management tool, based on nearly 30 years experience in real estate markets.

The finest real estate represented by Engel & Völkers throughout the world reflects the exceptional performance of the company in achieving its supreme position at the top end of the international property market.