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View Full Version : Overpricing your home 'takes you out of game'



robt
03-05-2012, 05:21 PM
http://www.iolproperty.co.za/roller/news/entry/overpricing_property_takes_you_out


One of the worst mistakes that many sellers make when putting their home on the market is overpricing the property, says Adrian Goslett, CEO of RE/MAX of Southern Africa.

Sellers often set a higher price for their property with the hope that if a buyer offers a lower price they will be able to negotiate close to the price they want.

"However," said Goslett, "if the property is overpriced, many buyers won't even take the time to view it and would rather look at other properties that are priced at what they deem to be reasonable market value.

"All overestimated prices will do is make properties that are priced correctly look like a bargain buy."

Seen something similar in my estate. Most of the houses were built during the boom period. Many of the home owners now can't afford their mortgage and want to sell but the prices are overpriced.

I'd say around 70% of the houses listed for sale have been on the market for 24+ weeks. One house I looked at has been on the market since Dec 2008 - surely the home owner, if he is serious, should drop the price?

latro
03-05-2012, 07:25 PM
http://www.iolproperty.co.za/roller/news/entry/overpricing_property_takes_you_out

Seen something similar in my estate. Most of the houses were built during the boom period. Many of the home owners now can't afford their mortgage and want to sell but the prices are overpriced.

I'd say around 70% of the houses listed for sale have been on the market for 24+ weeks. One house I looked at has been on the market since Dec 2008 - surely the home owner, if he has any sense of logic, should drop the price?

FTFY

But on a more serious note - he's probably trying to recoup the money he spent during the boom. Although after 4+ years of the house being in the market, my gut is telling me that common sense eludes him.

robt
03-05-2012, 09:54 PM
But on a more serious note - he's probably trying to recoup the money he spent during the boom.

That or he looked at his bank balance and worked out a figure that would get him out of the dwang :D. The house has a few empty rooms which doesn't make sense for the price tag so maybe he's selling off stuff hoping to stay afloat.

Guess I might also hang out for a high price if it was my last resort - a caravan isn't nearly as comfy as his current gig :).

I'm wondering just how many are on the brink of financial collapse, I suspect it's a lot more than the banks let on.

Shayd
03-06-2012, 09:06 PM
Having recently bought a new property myself I can honestly say that a large majority or owners have unrealistic expectations of their properties' value.

I saw a small town house in Bergbron(behind Northcliff) and the guy wanted R1000000 for a tiny 2 bedroom with almost no garden.

John
03-07-2012, 08:24 AM
This is standard. People trying to make a buck when there is none to be had. Their houses will simply sit on the market.

robt
03-14-2012, 02:50 PM
Having recently bought a new property myself I can honestly say that a large majority or owners have unrealistic expectations of their properties' value.

I saw a small town house in Bergbron(behind Northcliff) and the guy wanted R1000000 for a tiny 2 bedroom with almost no garden.

I think people sometimes forget just how much R1 million is.

Luckily you can vote with your feet.

McT
03-14-2012, 06:50 PM
Is there not also an element of the price setting which comes from agents creating false expectations?

McT
03-14-2012, 06:54 PM
I am working toward buying a second home for investment purposes. I will not take the "plunge" until I have sufficient capital to pay all fees cash and a reserve in case I run into problems with rental income. That said, there are plenty of opportunities out there, so I will not be in a rush.

peterson
03-15-2012, 09:12 AM
I am working toward buying a second home for investment purposes. I will not take the "plunge" until I have sufficient capital to pay all fees cash and a reserve in case I run into problems with rental income. That said, there are plenty of opportunities out there, so I will not be in a rush.Is this a good investment? Many banks (like ABSA) have warned that there will be negative house price growth in real terms. Will rent make up for it?

Dragon_Void
03-15-2012, 12:48 PM
Wrong, overpricing just makes it harder to get a bite

Species8472
03-16-2012, 04:41 PM
Is this a good investment? Many banks (like ABSA) have warned that there will be negative house price growth in real terms. Will rent make up for it?

They would rather have you invest it in their 2% "investment" products. Buying property is risky, but still the best investment out there.

McT
03-16-2012, 07:21 PM
Is this a good investment? Many banks (like ABSA) have warned that there will be negative house price growth in real terms. Will rent make up for it?

Maybe, but if I am in it for the medium to long term, I think it'll work for me. It's not my only means of investing, as I have gone in other routes too. Even if it doesn't grow too much in value, if someone else is paying it for me, is it not a good alternative?


They would rather have you invest it in their 2% "investment" products. Buying property is risky, but still the best investment out there.

I don't think there is an ultimate way to invest into your future. Financial gurus keep changing their tune on how to save and invest.

I think everyone must establish their own goals and find a way to achieve it. Today you can weigh up how aggressively you want to invest, i.e. what is your risk appetite. Some would rather go conservative and look at safe but meagre returns through a 32 day notice or money market and other will be aggressively playing the JSE. We all need to decide for ourselves.

Personally I do not want to retire rich although that would be nice. I just want to retire comfortably with the means to sustain my income till me and my good missus get the call up yonder. I do not want to be a burden to society nor to my children.

So I have looked at various options. I want to pay my own home off as soon as I can. I have started small retirement annuities all the way. I have a pension fund into which I pay as much as I am allowed. I have an endowment and unit trusts. I have shares and I would like to add to them when I can.

My next goal is to buy a small investment home for rental income. I do not want to do it until I am able to pay a fair sum of cash into it. So I am saving for that. I would rather live a comfortable life without the bells and whistles, but save as much as I can.

cerebus
03-17-2012, 01:49 PM
Getting an investment house for rental is fine, but it will take a while before you see the returns. Anyway I'm not one to have opinions about anything :)

McT
03-17-2012, 02:05 PM
Getting an investment house for rental is fine, but it will take a while before you see the returns. Anyway I'm not one to have opinions about anything :)

Why should you not have opinions?

For me a rental home (or several) is a long term thing. Mate of mine is looking at a 6th at the moment. He sees it as a long term investment and part of his retirement planning.

robt
03-19-2012, 05:30 PM
I am working toward buying a second home for investment purposes. I will not take the "plunge" until I have sufficient capital to pay all fees cash and a reserve in case I run into problems with rental income. That said, there are plenty of opportunities out there, so I will not be in a rush.

Personally I'd steer clear for a year or two or five :).

But if you do invest get a real bargain because there'll be very little real growth for the next few years so make sure your rental income covers your repayments (or as close to it as possible).

And go for entry level or sub-R1 million.

g@dget
03-19-2012, 05:34 PM
Poperty used to be low risk investment but lately investors have to accept more and more risks in their decisions. The saying "safe as houses" is not true anymore. Good returns can still be made but many bad returns are also seen!

ViperGTI
03-27-2012, 07:46 AM
Is this a good investment? Many banks (like ABSA) have warned that there will be negative house price growth in real terms. Will rent make up for it?

I'd say that will be determined by the location of the property and the buying price. But it will have to be a long term investment to make good sense.

I'm planning on moving to Centurion and I was planning to rent a place, but after seeing the availability of the houses and the rental prices, I have now decided to rather buy. Basically for about the same price as renting a 100sqm townhouse in a complex, I can buy bigger house with double garage and proper sized yard in a decent security estate. I'd say that if I were to rent the specific house I'm looking at buying, the rent would exceed the monthly cost (instalment + levies) of buying the property.