Many sellers make the same mistake, they think there property is worth much more than it really is. This is a common mistake as any seller would want the maximum price.
Estate agents all over South Africa often struggle with a seller who is adamant about their asking price. Some sellers feel that the agents are trying to cheat them with their estimated selling price. But this is not the case at all, the agents wants your property to be financially attractive to as many potential buyers as possible. Keep in mind that the higher the price of your property, the more the agent’s commission will be and they would like the maximum amount as well.
A seller should think about the price from a buyer’s perspective when pricing his property if he really wants to sell it. In current market conditions an overpriced property will be in the market for a very long time and the chances are good that the price will have to be lowered later on in anyway.
Sellers should keep the wider financial implications in mind as well. Potential buyers have many other financial implications when purchasing a home such as upfront costs that increased a lot in the past few years. These costs include a 10% to 20% deposit, transfers costs, bond registration costs and other legal fees, adding up to about R45 000 on a R800 000 property.
Banks are very strict nowadays about applying the National Credit Act to make sure that borrowers are not over-indebted, as was the case a few years ago. A potential buyer of a R800 000 property would need a gross monthly income of about R22 000 and a net income (after expenses) of about R8 000 to qualify for their loan.
With all this in mind a seller should be able to do his calculations to come up with a reasonable asking price without loosing money and time with an affordable and market-related selling price.