DURBAN - With the weak economic outlook persisting, we can expect the current buyer’s market phase to last until next year.
Seeff has a few tips on how to navigate the market.
A seller's market is when the economy and property market is in a positive growth phase and the buyer demand for property tends to be high with lots of competition for properties. During such a time, sellers are in the driving seat and they can generally name their prices and buyers will pay higher prices in order to get their hands on their dream property.
When the economy and property market goes into decline, there are generally a fewer number of buyers while the number of properties listed on the market increases. During this period, buyers are in the driving seat and they can usually call the prices.
We are currently in a buyers’ market because the economy and the property are in a decline, but all is not lost because there are opportunities in every market.
Here are some tips on how to handle buying and selling in a buyers' market:
Selling in a buyers’ market
It is important to keep in mind that your asking price needs to match the market. If the price is too high, potential buyers will not be interested and they will look elsewhere. Remember, buyers have loads of properties to choose from and they will want good value for their money.
However, you don't have to sell for cheap. In fact, far from it. If the buyer is serious, they will put a serious offer on the table, but they will be aware of the market and current selling prices. If you are asking a price that is bigger than the current selling prices, your property could possibly just stay on the market.
You should not give a mandate to an agent on the basis that they can get you a high price. Before you agree, request for a Comparative Market Analysis and make sure that they include the last five sales in the area so that you can see what has sold and for how much. If the recommended price is too low, then your best advice might be to take your property off the market until it gets better.
Buying in a buyers’ market
This is the best position that you would want to be in if you are a buyer. It also means that you are in a fairly good position to negotiate, but it does not mean that sellers will be open to bargain hunting it. Sellers will still expect to get a fair price for their property.
If you are serious about a property, put in a serious, but not overpriced, offer. Make sure to leave a bit of room for negotiation, but don’t take too big a risk. A good property at a fair price will always draw in buyers no matter the state of the market, especially in areas that are in high demand.
Finally, if you find a property that you really like and it is well priced, don’t risk losing it. Rather secure it while the market is down, because it is almost impossible to predict what the market will do next.