Anyone with examples of asking prices against actual sale prices? Im based in the middle east and thinking of investing in the city bowl/atlantic seaboard. Everybody in SA complains but asking prices actually seem to be moving up: so whats really happening? My thinking is : general asking prices minus 20% on a cash offer should result in a safe investment over time on a smaller rental unit. OK, let me have it...
In my opinion, during the boom people never really negociated too hard on their prices as they were safe in the knowledge that they would see a 15% - 30% increase annually. Same with negociating estate agent commission, it never mattered that the EA steals 7% - 10% as that money was made back in a rather liquid investment over a few months or a simple paint job.
Now days, if 50 of the same apartments in the CBD are asking the same price, you are safe in the knowledge that their value is just that. Look at the market and you will find the above 50 alongside 10 at a highr price (chancers), and maybe 1 or 2 lower (desperate / realist / something faulty).
You will be lucky to get 20% below the asking price of any of the above, very lucky. You will prob ably have to make at least 5 - 10 offers before you get a taker. I say go for 5 - 10% below asking price and you should be good. I'm tired of people thinking it's a slaughterhouse out there, it's not, people are buying the stuff.
A tip I've discovered though. If you despise estate agents as much as I do, and hate paying their ridiculous comm when buying property, follow the below steps:
1.) Find your property 2.) Put in a very low offer 3.) Wait for the counter offer, a serious seller will always counter at their lowest price 4.) Counter the counter offer with only about 10 - 20k off the price depending on the amount. 5.) The estate agent in this market will never risk compromising the deal by going to the seller with such a low value. They will always negociate their commission instead. 6.) Bingo, you buy property at sellers lowest offer, and cut a good 10k - 20k of the EA comm.
Hi Peet - I found myroof.co.za quite interesting in terms of quantifying the "actual" price of a house - arguably the selected properties are not an ideal sample and for some areas there might be little inventory, but you can still get a good idea of what buyers are willing to pay and how low sellers are willing to go...check out http://www.myroof.co.za/propertyDetail.asp?property_reference=MR029508 for example.
5 comments:
Anyone with examples of asking prices against actual sale prices? Im based in the middle east and thinking of investing in the city bowl/atlantic seaboard. Everybody in SA complains but asking prices actually seem to be moving up: so whats really happening? My thinking is : general asking prices minus 20% on a cash offer should result in a safe investment over time on a smaller rental unit. OK, let me have it...
In my opinion, during the boom people never really negociated too hard on their prices as they were safe in the knowledge that they would see a 15% - 30% increase annually. Same with negociating estate agent commission, it never mattered that the EA steals 7% - 10% as that money was made back in a rather liquid investment over a few months or a simple paint job.
Now days, if 50 of the same apartments in the CBD are asking the same price, you are safe in the knowledge that their value is just that. Look at the market and you will find the above 50 alongside 10 at a highr price (chancers), and maybe 1 or 2 lower (desperate / realist / something faulty).
You will be lucky to get 20% below the asking price of any of the above, very lucky. You will prob ably have to make at least 5 - 10 offers before you get a taker. I say go for 5 - 10% below asking price and you should be good. I'm tired of people thinking it's a slaughterhouse out there, it's not, people are buying the stuff.
A tip I've discovered though. If you despise estate agents as much as I do, and hate paying their ridiculous comm when buying property, follow the below steps:
1.) Find your property
2.) Put in a very low offer
3.) Wait for the counter offer, a serious seller will always counter at their lowest price
4.) Counter the counter offer with only about 10 - 20k off the price depending on the amount.
5.) The estate agent in this market will never risk compromising the deal by going to the seller with such a low value. They will always negociate their commission instead.
6.) Bingo, you buy property at sellers lowest offer, and cut a good 10k - 20k of the EA comm.
Peet
Where is the commodity cycle my friend? On a high or a low?
Is the ZAR a "commodity currency"?
Where is the JSE? On a high or a low?
Where are property prices? On a high or a low?
SA is not good value yet in short.
However CT will always be the last outpost. Secondly it is one of the worlds best cities. You are also looking at the prime areas.
House prices going up?
Do you adjust for real inflation Peet which runs at between 8 to 12.5% per annum here depending on what you are analyzing?
Just a few more things to think about!
Hi Peet - I found myroof.co.za quite interesting in terms of quantifying the "actual" price of a house - arguably the selected properties are not an ideal sample and for some areas there might be little inventory, but you can still get a good idea of what buyers are willing to pay and how low sellers are willing to go...check out http://www.myroof.co.za/propertyDetail.asp?property_reference=MR029508 for example.
@ Peet,
apologies for the late response.
If you provide me with an email address I will send you stats of registered sales of the last 2 years in City Bowl and Atlantic Seaboard.
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