“There is little reason to make uneducated offers in the prevailing market,” says Martin Schultheiss, CEO of the Harcourts Africa property group. “And the fact that most sellers are keen to sell does not mean that many do not try their luck by over-pricing their properties. Indeed, according to FNB figures more than 80 percent of properties are currently sold for 12% less than the asking price.”

He advises prospective homebuyers to do their homework before making an offer on a property. “The price you offer should be based on local market conditions, including recent prices achieved for similar properties in the area, as well as the condition of the particular property.

“Find out how long the property has been on the market and if the current asking price is lower than the initial price. If the property has been languishing on the market, the owner may well be prepared to lower the price further in order to achieve a sale.

“It is also useful to establish whether or not the seller has already bought another home since he may be willing to accept a lower price if you have a sizeable cash deposit and have been pre-approved for a bond at a bank – both of which will speed up the transaction.

“Seasoned estate agents marketing a property will be able to supply much of this information and while they principally represent the seller, they will readily supply answers when prompted.”

Schultheiss cautions, however, that buyers should not get so enthusiastic about negotiating the price down that they lose the opportunity to buy a home they have set their hearts on.

“Making a ridiculously low offer is likely to achieve little more than a flat refusal from the seller to entertain any further negotiations,” he says. “Rather ask the agent if the seller has indicated his willingness to negotiate – and what limits he has set.”

Article by: www.harcourts.co.za