Selling? Hire the right estate agent

Although the debt position of South African consumers generally 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.”

The latest statistics available from the National Credit Regulator show that SA has about 25,5m credit-active consumers who between them hold about 79m active accounts. The percentage of borrowers with some credit impairment declined to about 48% (12,25m) in the first quarter of the year and the total number of impaired accounts they hold to around 19,25m.

The Reserve Bank also noted when deciding to keep interest rates unchanged last month that while new borrowing to households had continued to increase this year, year-on-year growth in private sector credit extension remained low at 5,41% in July, down from 5,68% in June. On the back of this, household consumption expenditure contracted by 1,3% in the second quarter, which was the first decline in two years.

“Nevertheless, says Kotzé, “there are still many that are really struggling to make ends meet, and rising fuel prices and lack of employment growth are not helping, as reflected in the latest FNB Property Barometer statistics which show that the percentage of owners selling to relieve financial pressure rose to 14,7% in the second quarter of the year, compared to 12,1% in the first 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 get what you pay for’.

“Agents who offer to discount their commission in order to secure your mandate will then probably spend more of their time and money marketing and exposing other properties on which they stand to earn more – which is the 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.”