Stay away from cheap agents if you need to sell in a hurry
PUBLISHED 11 JAN 2019
Although the overall debt position of South African consumers has improved over the past few years, many individuals are still trapped in very tough situations where they have to make hard choices, says Gerhard Kotzé, MD of the RealNet estate agency group.
“For those who are home owners, this may include choosing to use all of the equity they have built up in their properties over years to try to consolidate their debts and make them more manageable, or even opting to sell their home to try to pay off some big debts and ‘start over’ with less financial pressure.
“And for those who do have to make the latter choice, it is vital to appoint a properly qualified and experienced agent to ensure that their sacrifice will not be in vain and that they will obtain the best possible price for their home in the shortest possible time.”
SA’s overall household debt to income ratio has improved from over 86% to under 72% over the past 10 years, but the latest statistics available from the National Credit Regulator show that of the country’s 24,6m credit-active consumers, only 61% are in good standing. This means that there are about 9,6m consumers with some type of credit impairment, such as an account that is more than three months in arrears, an adverse listing, a judgment or an administration order.
In addition, the latest Reserve Bank figures show that unsecured lending is on the rise again, having shown a year-on-year increase of 8% at the end of October. This type of borrowing includes balances on credit and store cards as well as overdrafts and personal loans, and an increase typically indicates that households are feeling the pinch and relying more on credit to buy necessities.
“Indeed,” says Kotzé, “there are many people that are really struggling to make ends meet thanks to the high fuel prices and rising unemployment over the past year, and the latest FNB Property Barometer statistics show that the percentage of home sellers who are selling in order to relieve financial pressure rose to 16,3% in the third quarter of last year, from 15% in the second quarter.”
He says the necessity of a swift, uncomplicated transaction really comes to the fore when the home seller has large debts to pay that are increasing every month as the interest on overdue amounts gets added. “And as tempting as it may be when one is in this situation to opt for the agent who is prepared to sell the home for the smallest commission or a flat fee, owners should bear in mind that you usually get what you pay for.
“Agents who offer to discount their commission in order to ‘help you’ - and secure your mandate - will then probably spend most of their time and money marketing other properties on which they stand to earn more, which is the exact opposite of what you need at this stage You would do much better to work with a top-notch agent with the experience and motivation to ensure that your home is sold as fast as possible for the maximum possible price.”
Kotzé says urgent sellers should also guard against agents with insufficient knowledge of local market conditions and those who encourage them to bump up their asking price, as either of these failings is likely to result in delays in getting the property sold.
“On the other hand, a good agent with excellent market knowledge, a level head when it comes to setting an asking price and access to a range of marketing methods as well as a large network of potential buyers will relieve you of a lot of the anxiety about your situation.
“Consequently, it is well worth spending some time to seek out such an agent before you put your home on the market and risk ’throwing it away’ in your desperation to be rid of your debt burden.”