Billionaire property owners' tactics

A recent study undertaken in the USA has shown that the 700 top property owners in that country (all of whom are property millionaires measured in dollars but billionaires in rand terms) make good use of the planning, research and comparative market analysis facilities now provided by the better agents and on the Internet.

The survey has also shown that if they have one characteristic in common it is that, while trusting their gut reactions, they also take a “careful commonsense” approach to their purchases and do not allow any emotional factors to influence decisions.

Discussing the survey, Mike Greeff, Chief Executive of Greeff Properties, said that when buying a home to live in it is inevitable that the purchaser will be swayed by some emotional factors. However, when buying as an investment, reason has to play the dominant role - and usually does with the shrewd investors surveyed.

The survey, he said, shows that astute buyers never allow themselves to be rushed into a purchase. They take their time and meticulously study market conditions before making decisions. They will in most instances let a property go rather than pay above the price they believe it to be worth, even when they like it.

“When they do put in an offer it will usually be below the asking price,” said Greeff. “This is fair enough because in most Western economies homes are still selling at 5% to 12% below the asking price.”

If they see the market rising and offers becoming more competitive they change their tactics and adjust their pricing accordingly, said Greeff.

Most, he added, study the property trends and almost always purchase well before the market hits the top of a cycle. Once that point has been reached they tend to be markedly reluctant to invest until conditions are more favourable.

A fairly high proportion (±25%) of those surveyed, added Greeff, spefically target repossessed homes and properties sold under difficult circumstances, e.g. following a divorce, forced sale or when the property is sold as part of a deceased estate.

Such homes, said Greeff, can sometimes be bought for as much 30% below their true value, especially if they have been neglected for some time prior to coming on the market.

An important characteristic of the successful owners revealed by the survey, said Greeff, is that they have good relationships with reputable agents.

“It may take time for the average buyer to find an agent who suits his mindset and personality and who will always be objective but and put the client’s goals first. When you do find such an agent he or she can be a wonderful counsellor and ally and it pays to cultivate and build up a relationship with such people to your mutual benefit,” said Greeff.

Article from: www.greeff.co.za