By Barrie Swart (Operations Manager &Head of Gumtree Property).
The property market is subdued right across South Africa. While there are some pockets of robust sales, generally there’s a sense of buyers and sellers waiting for an upturn in the economy, or some good news, to restore the kind of confidence that’s needed for a long-term, major investment like a property purchase.
But a soft market, combined with some hard-nosed negotiating skills, can lead to a seriously good deal, especially for first-time buyers. If you’re forking out on rent, you might as well use that money to take the gap now and build a property asset.
Gumtree’s Barrie Swart has this ten-step guide for first-time success in the current market.
- BUY TO LIVE. The main reason for your purchase should be to provide a happy home. If the market rises quickly then you have also scored financially. If it doesn’t, you still have a place you love and you’re building an asset instead of paying rent.
- BE UNFAITHFUL. If you really set your heart on one property only, you may overpay even in a down market. If you have a range of options, and the selling agents know that, you can confidently negotiate a reduction in price.
- RE/SEARCH. Use every available online tool (including Gumtree’s extensive listings) to check properties, prices, areas, sales, trends and rates. Show the agents that you are well informed and prepared to ask the right questions.
- TRADE UP. Once you’ve established your affordable budget don’t automatically spend less if a bargain appears. In the long-term, it might be smarter to move up a bracket – an extra bedroom or a better location – for the same affordable price. Or maybe use the extra funds to renovate a place with potential.
- READY TO GO. Have your bond arrangements in order and your deposit reasonably accessible. You might need to move fast to secure a great deal.
- UNCONDITIONAL LOVE. An unconditional offer with no existing property to sell, and an approved bond already lined up, is a real logistical bonus for the seller and worth a significant drop in the price.
- TIME IS ON YOUR SIDE. The longer a property has been on the market, the keener the seller will be to take an offer. On the other hand, you need to ask around to find out why it hasn’t sold for so long. Is there a hidden issue with the house or the area?
- DISTRESS FOR SUCCESS. Look for signs that the seller is under pressure to sell. They may have already committed to a new purchase or be moving overseas or they’re facing some cash constraints. In those circumstances you can hold out for a seriously good deal.
- MAKE AN OFFER THEY CAN REFUSE. The agent might say the buyer won’t accept the very low price you have in mind but insist on putting in a cheeky offer anyway. It may just trigger a re-think.
- WALK AWAY. Always be prepared to give up on a property. Don’t get so emotionally attached that you make a bad decision. And make certain the agent knows that you are in no way desperate. If you need time, ask for it. Make sure that you are sure.