There are three words that sellers have come to dread – ‘submit an offer’. No one enjoys being cheated out of their hard-earned cash and when a seller believes that his property is correctly priced, the idea that someone has the temerity to offer a lower price can really hurt.
Generally speaking, most South Africans are not used to bargaining. We see an item we want and in most cases, wouldn’t dream of trying to talk the shopkeeper into selling the item for less than the original asking price. Property is different, particularly in a buyer’s market, and sellers need to change their mindset if they want a sale.
It has long been believed that the first offer sellers receive is often the best. Most people however reject the first offer outright. Unfortunately, in many instances this offer is going to be as good as it gets and subsequent offers are often lower.
People have different reasons for selling and the motivation behind the sale plays an important role. Those who are in no rush to offload a property may well be able to afford to bide their time waiting for someone who appreciates that their property is worth the full asking price. Others are not so lucky, and when the sale becomes urgent, whether due to financial constraints or because another property has been bought, sellers may just have to swallow their pride and accept that they are not going to get the full asking price in time.
Many who have been forced to sell for financial reasons believe that they have to sell at a certain price in order to settle outstanding debts. The sad part of this is that very often, these properties remain on the market for longer and the debt grows larger as the seller continues to reject any offers which fail to meet his requirements.
There are times when it is better to take the money and run, even if the amount offered is less than you need. The costs associated with keeping a property are high and apart from the obvious factors such as interest repayments, rates and general maintenance need to be factored into the equation. Those who can no longer afford to make their bond payments to the bank are in a much more dire situation as although the banks have become more lenient and allow more leeway for defaulting bondholders, they will certainly not wait for their money for ever. It stands to reason that a repossessed property is going to sell at a far lower price and homeowners need to remember that they will be held responsible for any money that is still outstanding after the property has been sold.
Another point worth noting is that regardless of whether the property is under-priced or overpriced, buyers are still going to submit lower offers. This does not mean that sellers should inflate the selling price in an effort to get their full asking price. This type of reverse psychology does not work and sellers, who attempt to pull the wool over the buyer’s eyes so to speak, are, nine times out of ten, going to come unstuck.
No one enjoys being ripped off, however, in most cases, the seller will still make a profit even when accepting a lower offer. It is not the time for games, it is tough out there and if you want to make the best of a bad situation, it may just be better to swallow your pride, get off your moral high horse and take whatever you can get out of the deal.
Article by Lea Jacobs