Real Estate Investor Magazine South Africa October 2018 | Page 18

TECHNOLOGY uncertainty and economic challenge (somewhat akin to current South African trading conditions) – this requires a completely different set of professional real estate skills to successfully conclude a sale - for instance, to close the sometimes 30% gap between asking price and the buyer’s offer. This requires very sound market understanding and adept negotiation, as well as intricate understanding of human behaviour. Fundamentally, the risks associated with selling what is more than likely someone’s most valuable asset are significant – in all market cycles regardless - particularly given that it is likely that the average client will not transact more than 3 or 4 times in their lifetime and will therefore not be that well-versed in the nuances of the transaction. The role of the astute estate agent is to mitigate this risk and ensure absolute comfort. The advent of the now globally-ubiquitous property portal has evidently levelled the playing fields as far as gaining access to buyers’ leads is concerned, thereby purportedly minimising and devaluing the role played by estate agents as far as their proprietary marketing and networking is concerned regarding their ability to attract buyers. This too is somewhat of a misnomer. Yes, the property portals – which incidentally are also utilised by all professional traditional estate agencies as well - do in fact drive quantity, but what of quality? Any top-producing professional estate agent will tell you that they would far rather have fewer yet more qualified buyers than more unqualified buyers. It is therefore integral to an agent’s service that their personal network has the ability to access the ‘right’ buyers for a property and that these buyers are then strategically managed to ensure the most lucrative offer is brought to the benefit of the seller. In fact, this is the fundamental benefit of awarding an agent an exclusive mandate. In other words, it gives the agent the ability to properly manage the potential buyers on a property, rather than having agents competing with other agents in order to try and close the deal first and, in the process, not putting the best interests of the seller at the heart of the service transaction. It should also be borne in mind that, as the price range of property increases, so obviously the number of qualified buyers reduces, by definition. Certainly, as the value of a home increases, there are increasingly fewer buyers available. It is therefore incumbent on the agent and their brokerage to be able to have access to these discerning buyers and to introduce them to the client’s property. This is then where the key skills of the estate agent kick in – to close the deal. This includes having the skills to get the offer in writing and to guide them at that moment to elicit the best price SOUT H AFRIC AN www.reimag.co.za co.za eimag. www.r SOUT H AFRIC AN SO UT H AF RI CA N www.reimag.co.za © © H SO UT N AF RI CA www.r eimag. © co.za © YOUR FI FREEDO NANCIAL RISK VS RETURN OLIO Getting a foo M GUIDE property thold Property WORL YOUR Hotspot D s PORTF Abound ladder on the COMMERCIAL TRENDS Multiple Opportunities SM Cape Town CBD Spike AR REAL ESTATE TECHN Ma T PR New Disruptors in the OLOGY ke more mo OPERTY M t Game AR ney in Trans the Investmen Game 2017 KETE form OFFSHO Master PROPE RS Your Wealth RE RTY PRACTITIONE UK R’S & US BILL Investor Major Changes Afoot h as Touc the Mid MIK W E ARREN with VESTOR Gifted EAT IN E A GR n IN PROPERTY BECO st M Practices to Wi YOUTH Claiming ATUS their Space 6 Be JUNK rty? 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VAT) 09 3 SAPOA WINN JOURN ER ALISM AWAR DS Prope Publication rty of 2013 & the Year 2015 Effectiv Highly e Truste es Fixing up Jozi and then to close it with the seller i.e. closing the proverbial ‘gap’ and then to create a watertight document set. It’s about knowing how to read clients, understand their layman’s requests and to formalise them in a legal agreement by ensuring that all bases have been covered and any issues dealt with which could potentially create disputes down the road. And that both the seller and buyer’s minds have actually met entirely and completely. This is central to the real value that the individual agent adds to the process. Remember, in the South African context the estate agent is in fact managing the tension between what are ostensibly two diametrically opposing desires i.e. the seller, who wants the highest price and the buyer, who wants the lowest. This ‘dance’ requires extremely adept human skills and an understanding of sales psychology. Another critical dimension of the estate agent’s consulting skills is that of pricing strategy, bearing in mind that, while any property will sell if the price is right – how do you maximise the price so as to ensure a maximum return to the seller on his/her most valuable asset? This is then not only about the price itself alone, but the positioning of the property correctly in the market place, viz a viz competing properties, so that it stimulates quality buyer leads. It’s a fine balancing act - get this wrong and the property simply sits on the market and runs the risk of becoming ‘stale’ or stagnant. Incorrect pricing creates a long, arduous process and causes fatigue and a great deal of seller discontent. Also, the property invariably sells for far less than it ordinarily would have had it been correctly priced at the outset. So it’s very much a case of instilling confidence in the seller at the start that the estate agent is at the forefront of what’s happening in the specific sales territory. Online information and valuation mechanisms can serve to provide scientific analysis as to pricing – but it is then the intuition and skill of the experienced and professional agent that further positively influences this price in the seller’s favour.  In conclusion, it can be said, to use a somewhat cliched adage, that you get what you pay for. Certainly, there is room in the industry for discounted service offerings, but these translate into a discounted version of all the factors noted here (most particularly service) - meaning that the mitigation of the risk inherent to selling any residential property plummets with the price charged for the service. Clients who choose these ‘lesser offerings’ need to be aware of this. It should also be noted that the points mentioned above pertain generically to the concept of utilising the services of the so-called traditional (commission-earning) estate agent. However, it is only those agents who are in fact indeed able to provide the value as defined, who are really worthy of their premium commission. Take your business or development to the next level Advertise in a leading property magazine. Contact Roy at: [email protected] [phone] OCTOBER/NOVEMBER 2018 SA Real Estate Investor Magazine