Your Property
100 % of the SUCCESS of the sale of your property Mr & Mrs Seller, will be determined by your SERIOUSNESS to sell.
Your Seriousness to Sell
Your seriousness to sell will be determined by 3 factors.
1. PRICE2. TERM3. FEE
The Pricing Pyramid
Overpriced
Market Price
UnderpricedNumerous Buyers
The Right Buyers
No Buyers
Few Buyers
Selling Price
Do’s & Dont’s of the Pricing Pyramid
Pricing to Sell• Marketability is improved by pricing
realistically.• To the buyer price is the most important
negotiating factor.• Price compensates for a property’s shortfalls
and inadequacies.• Demand and not time sells houses – realistic
pricing creates demand• Initial marketing time is crucial.• Buyers buy by comparison and elimination.• Buyers compare price and value for money.• Buyers can easily obtain market related
information and are well informed.
Do’s & Dont’s of the Pricing Pyramid
DO:• Combine a realistic asking price with initial
demand.• Maintain negotiating advantage with realistic
pricing.• Avoid over exposure from unrealistic pricing.
DON’T:• Eliminate buyers by outpricing them.• Chose and agent only on promised price.• Spoil your chances of making good impressions
on buyers by overpricing.
Do’s & Dont’s of the Pricing Pyramid
Over valuation can affect a prospective sale!• Prospective buyers can be lost• Offers are eliminated.• Market activity is reduced.• Property can become ‘stale’ on the market.• Your home may be used by agents to help sell
realistically priced properties.• Your sale may become urgent then what offers do you
accept?• Marketing time and seller inconvenience is extended.
Remember BUYERS BUY BY COMPARING YOUR HOME TO OTHER
PROPERTIES CURRENTLY ON THE MARKET.
Value V Price
• Agents use the term Price of the home.• Its about value not price.• Separate a price from value.• Value is determined by the conditions of the
market place.• Let the property professional's talk with you to
determine the value of your property.• Then we can discuss the price of your property.
1998
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2005
2006
2007
2008
2009
2010
2011
200
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10% BankNed 10Yr 8.5%6% Inflation12.50%2007 PeakBubble
Compound Growth Rates
Overpaid
R10
00’s
1990 1995 2000 2005 2010 2015 2020 2025 2030
Sanlam 60 Year “ Real Estate”
Double Dip Recession
42 Months
Recovery18 Months
June 2008
June 2009
June 2010
June 2011
June 2012
3 Years
June 2007
Recovery7 – 8 Years90 Months
Double DipSexwale warns about the tough times aheadHuman Settlements Minister Tokyo Sexwale said South Africa could be "headed for another recession".Sexwale told the 12th international housing and home warranty conference at Cape Town's International Convention Centre yesterday that, with South Africa's trading partners Portugal, Italy, Ireland, Greece and Spain in a "huge amount of sovereign debt", a second recession was looming."We hope and we pray that the world does not go back into another recession because we expected that this recession would be a 'V' or a 'U', but it is threatening to be a 'W', " said Sexwale.A W-shaped recession, or "double-dip recession" is one in which an economy experiences a recession, comes out of it, but slides back into recession again.The government has long maintained that South Africa is emerging from its recession, and last month Finance Minister Pravin Gordhan said there was only a 40% chance of a "double-dip recession" happening. But, according to media reports from last weekend's global finance talks in Washington, US, International Monetary Fund managing director Christine Lagarde warned that the global economy was in a "very dangerous place".European financial websites reported yesterday that Greece is more than R3-trillion in debt, much of this owed to European banks, and will probably default on its loan payment in the next three months. The European Financial Stability Facility would then need to find a reported R17-trillion to support the governments of France, Spain, Portugal and Italy as they bailed out their own banks - or the world would face a second recession."It is very frightening to hear world bankers saying that the world economy has entered into a very dangerous phase," Sexwale said."If a bank makes that statement, you have got to sit up because banks are very, very careful in what they say."South Africa and other developing economies were unlikely to recover from a second recession quickly, he warned."Long after industrialised nations in North America, the Eurozone and Asia have left the hospital, many of us will still be lingering in intensive care. There are many developing economies that will not come out of this that easily," he said.He also warned about climate change, and said the US government had to "come on board" the global drive to combat global warming.Calling for a minute of silence for Kenyan environmental activist and Nobel laureate Wangari Maathai, who died on Sunday morning, Sexwale said "cities are threatened"."Cape Town may not be there in the next 100 years, Durban, cities like New York."If we continue to emit negative gases into the sky at this rate, the biggest impact is on human settlements. Whatever we plan, climate change may negate."He also said the government would not be able to build free houses for the poor forever."There has got to be a cut-off date. We are discussing that. But you can't cut off the poor right now, particularly in the current national economic environment. We can't sustain what we are doing for a long time," he said.The private sector would have to contribute, and that was why Sexwale would launch the "each one, settle one" campaign at the Johannesburg Stock Exchange on Thursday.The campaign would ask "captains of industry" to "empty their pockets" to build houses, Sexwale said.
27 September, 2011 The Sunday Times
Consumer Confidence
Consumer confidence levels improved across all income and population groups, reveals the FNB/BER Consumer Confidence Index (CCI) which shows that having slumped from -3 index points during Q4 2012 to a 9 year low of -7 in Q1 2013, the CCI rebounded to +1 in Q2 2013.Middle and high income consumers are notably more optimistic about the outlook for their household finances and less concerned about the appropriateness of the present time to buy durable goods compared to low income consumers, according to the index.The rise was larger and the actual levels remain higher for middle and high income consumers compared to the low income group (earning less than R2 000 per month).Middle and high income consumers are notably more optimistic about the outlook for their household finances and less concerned about the appropriateness of the present time to buy durable goods compared to low income consumers, according to the index.According to Sizwe Nxedlana, chief economist at FNB, Q2 2013 level of consumer confidence is still well below the post apartheid average of +6 index points, signalling a significant moderation - but not a collapse - in household spending.Nxedlana says the index is typically a good indication of consumers’ willingness to spend or use credit, while disposable income growth and their access to credit determine their ability to spend.“The improvement in the CCI in Q2 2013 suggests an increased willingness among consumers to spend and helps to explain the improvement in retail and car sales in recent months.
08 August 2013
Determining Real Value
• What did you pay.• When did you buy.• How much do you owe.• Bank valuation.• Municipal valuation. N.B. Completed 2007 escalated by 40%
• Comparative Market Analysis. N.B. Consumers no homework
• Replacement costs. N.B. 40% cheaper to buy than build.
• SARS price!• Sellers opinion.• Agents opinion to obtain mandate.• Buyers Highest Price.
Boom and BustThe Real Estate Market
History
Low
Medium
High
20052006
2007
2010
2009
2008
2011
2012
2013
2000
ForeignersBanksSellersAgentsPressBuyersExchange RateMandela’s ReleaseEtcEtc
Sellers expectation in the real estate market
Stock MarketOil PriceCredit ActInterest RateForeignersZimbabweNew Bank LegislationBanks No CashANC Youth LeagueDebt LevelsBlack ListingsIncompetent GovernmentAuctionsEtcEtc
1. Wishing Price2. Asking Pice3. Replacement
Price4. Market Price5. Municipality Roll6. Bank Price7. Credit Act Price8. SARS Price9. CMA = Priced to
SellPrevious 90 Days of Sold Properties
The first offer could only come 180 days later
Second wave of credit crisis = Commercial default.
Negative Equity.
R900k bond = +-R50k net income per month
Recovery?Excessive optimism Excessive optimism
Excessive pessimism
Over Bought
Over Bought
Negative N
ews
Pos
itive
New
s
Some Buying
Credit and Cash Dry Up Bulging Inventories Production Slows Prices Slip A Little Worry Buying Dries up More Lose Confidence Layoffs Begin More Worry Savings Build Put Off Buying
Excessive FearPanic TimeWE ARE HERE
Smart MoneyBuys/ Invests
TERM• Statistics show that the average buyer is stalking
the market for up to 293 days before he or she makes a decision in buying.
• The buyer of today is a highly educated and knowledgeable property purchaser.
• He has all the tools available on Internet to even know more about the property, and area he wants to buy in than the owner or even most of the Agents.
• He is spoilt for choice as Knysna for example has in excess of 700 properties on the Market.
• It is fact that about 87% of people are selling for less than there asking price. In 2004 only about 33% of sellers were not getting what they set out for.
• This is due to the fact that we have extremely knowledgeable buyers in the market place.
FEE• If the rule for buying real estate is Location
Location Location then the rule for hiring an agent is Skill Skill Skill.
• The higher the skill of the agent, the higher the price you will get. The lower the skill the lower the price. Cheap agents get cheap prices that’s the way it is.
• Think of it this way Mr Seller if an Agent is prepared to give his or her money away, how much quicker will they give your money away when they have to negotiate. You see we don’t give our money away and we don’t give yours away either, that’s the way it is.
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