Real estate myth busted
| Rising property prices have convinced many sellers they
have to sell at high prices in order to be able to afford another property.
But this is no longer true in the current market, says Conrad de Swardt, who owns a string of 16 Homenet real estate offices throughout the Western Cape.
Prices in the region are rapidly stabilising as more and more sellers are lowering unrealistic expectations regarding selling prices, simply because that is what the market now demands.
This has a healthy ripple effect because when they sell at lower prices, they also offer to buy at prices lower than what other sellers may demand. This is forcing sellers price expectations downward a healthy development in the market.
He says it is important to stress that this trend is not harming the market prices are not dropping, but unrealistic expectations are being lowered.
The rapid price increases in the past few years meant massive capital gains for homeowners, but they were largely artificial because they had to be re-invested in the next property. At the same time, though, rising prices did create a widening gap in affordability for new entrants to the market.
In most cases, current sellers bought their properties years ago at prices far below current market prices and by lowering their expectations, they are able to attract a wider circle of potential buyers, ensuring a quicker sale and faster return on investment.
De Swardt says sellers who have already converted their investments into cash are in a much better position to negotiate when buying new property.
Indeed the best advice currently is to drop your price and take less profit, but equally, offer less than the asking price on your next home to recoup your artificial - loss.
ISSUED BY HOMENET
Article from: www.homenet.co.za