One uncomfortable fact coming to light is that sellers, buyers and estate agents make the same mistakes year after year, despite regular warnings in the property media and an ongoing flow of educational literature from the major agencies, conveyancers, banks and bond originators.
This is according to Bill Rawson, Chairman of the Rawson Property Group, who says sellers still make the big mistake of appointing, as their estate agent, a person who offers them the lowest sales commission.
“The thinking behind such a decision is quite clearly flawed, because the estate agent who is forced to offer a low commission will probably also be less than competent in securing for the seller a good sales price for his home. This fundamental fact is often not recognised by sellers,” he says.
Furthermore, Rawson says the estate agent who charges a low commission will often be found to be incapable of financing adequate advertising exposure, which in the long run will most likely result in the home being sold at below its true market value.
Rawson warns, too, that another common mistake is to give the mandate to the estate agent who claims to be able to achieve a higher than expected sales price.
“Almost always, the high valuation estimate will prove to not be realisable, and the estate agent will after two or three months have to advise the client to lower his price. In the meantime, the market for that particular home may well have been seriously affected.”
He says buyers, for their part, also continue to make the same mistakes, the most common of which is to fail to research all the opportunities available.
“Of course, it is possible, and legitimate, to fall in love with one of the first houses one sees and to make an offer on the spot. In most cases, however, it will definitely pay not to be impulsive.”
Rawson says all too often in his experience, the buyer who puts in a quick offer gets it accepted and then discovers down the line that, quite nearby, he could have acquired something even more suitable, and possibly at a better price.
Then, too, he says it is never a good idea to opt for a house simply because it is quite obviously a good financial proposition. The lifestyle that it offers is equally important.
“Home buying is an activity that should never be looked at purely from an investment viewpoint. A home can add or detract so greatly from the occupants’ enjoyment that a decision to buy should never be taken purely for financial reasons,” says Rawson.
He says another common buyer mistake is to fail to check the zoning for the area, with the consequence that a few years later, the homeowner may well find that his view is blocked by a medium sized apartment block, a retail complex or a new home with two or three storeys, possibly right on his boundary.
Rawson says estate agents, for their part, are sometimes inclined to forget that in many cases they are selling to a couple, both of whom must like the home. Satisfying only one party will often result in the other party being annoyed and disillusioned.
In the long run, he says it pays to ensure that the home meets the requirements of both the buyers.
Equally important is the abovementioned fact that estate agents should not succumb to the temptation to raise the valuation on a property simply to get the mandate. This is still done far too often, and it is often accompanied by an over-optimism of the time that will be required to sell the property, he says.
Rawson says recently, homes in the high demand urban areas have been selling fast, but in normal market conditions, which will probably be seen again within the next year, being bullish about a fast sales time will lead to disappointment, and even resentment.
Finally, estate agents need to remember that communication is key. A good estate agent will always keep his sellers and buyers in the know, even if this means making contact on a daily basis, he says.
By: Property24, 2015