Simon’s Town Real Estate News

Lessons: Selling A Simon’s Town Home Today

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A few days ago we sold a charming Simon’s Town home to a nice guy who wants to use the home as lodge/self catering accommodation. The buyer is a capable businessman in the tourism industry. He knew exactly what he wanted. He is a cash buyer and therefore a decision maker.

Just before the current real estate deflation made an offer 20% less than the asking price. I mentioned that he had cash. When we got this offer we thought that even if this offer was reasonable, given the way the market was petering out, the owner may be offended by the offer.

We were obliged to present the offer and we did. Obviously the owner rejected the offer. The buyer was then willing to increase his offer by 7% but to no avail.

We knew that the only person who decides on the selling price is the buyer and let’s assume this is correct; then why did the seller not accept the offer? A few suggestions:

1. We were at the edge of the cliff in the property market and all involved did not realise the severity of the deflation at the time.
2. The asking price may have been too optimistic in the first place and it created an expectation with the seller.
3. When the offer was made the house has only been on the market for a very short period.

As we took more and more people through the home the common issue was the price. It was too high.

Then 10 months later the home is still on the market and the seller is now prepared to take the offer from the original buyer - if he is still interested.

The good news is that the buyer was still interested but we had no power to negotiate and his original offer of 20% less was the final offer. He did not even consider the extra 7%.

What did we learn from this home selling experience?

• When you decide to sell your home then separate emotion and reason.
• Know that the buyer is the one deciding what the selling price will be.
• I believe that the buyers are more informed on what the asking price should be because they are the people spending money today. And they are comparing many homes before they make an offer.
• If the buyer has the cash take it even if it’s less than what you want. Because very few people qualify for bonds today. (Note: you need to earn about R130 000 per month to afford a R3 million home).
• The buyers market today is a small market. Therefore if you reject one buyer with cash you may reject the only one out and about.
• We, in our personal capacity, as home owners have always believed the first offer is the best offer. Let my friend continue: There’s an old real estate rule of thumb that the first offer you receive is usually the best one. I’ve run into this with several listings where the seller received an offer early on, made a stiff counteroffer and the buyer headed for the hills. In some cases, as much as 24 months and several price reductions later, another offer finally came in only to be significantly lower than the first buyers’ offer. If you plan on selling your Simon’s Town home then read the story here.

If you have any advice, comments or ideas for this real estate agent then leave a comment. Please.

Regards

Johan Horak