During the course of a calendar year, only about 30% to 35% of the properties that come onto the market actually get sold, according to Steve van Wyk, managing director at Seeff Centurion.
Meanwhile, those properties that do sell, sell at 9% lower than the original asking price, a recent FNB property survey found.
Van Wyk says price remains the most important factor. “There is no reason for a correctly priced property not to sell within 30 to 40 days, given the current market conditions,” he says.
Van Wyk offers 12 reasons for why a property might not be selling:
The number one reason why property does not sell is because it is overpriced relative to similar properties or relative to the current market conditions, he says.
If there are many competing properties offered for sale, buyers are able to select the best priced property.
The location or position of a property can both influence the value as well as whether or not it will sell quickly.
“Examples of generally understood poor locations are properties on a busy road, property next to a bus or taxi stop, properties near a train station, properties near a bottle store and properties near a busy shopping centre,” says Van Wyk.
The condition of a property can also play a big role in the final selling price.
If the property is being sold as a fixer-upper and the price has been decreased to allow for the money that needs to be spent to fix it up, then it should not be a problem.
However, when a run-down property competes in the same price range as similar properties that are in good condition, it will not sell.
Over-capitalisation due to building an additional room or two, or merely upgrading the kitchen and bathrooms, will not always lead to the owner being able to recoup the additional expenses that were outlaid when the property is sold.
An economic downswing means that fewer properties will sell, as banks are not that keen to lend money and buyers have less disposable income to purchase a new property with, says Van Wyk.
Certain areas suffer much higher crime rates than other areas, and the crime statistics may well be a reason for certain properties either not selling or taking an extremely long time to sell.
There has been a developing trend to move to secure estates or secure sectional title complexes, according to Van Wyk.
Suspensive conditions in an agreement of sale are another reason for a sale not to materialise.
For example, either the buyer did not get the required finance from the bank or the sale of the buyer’s current property fell through.
High monthly levies or once-off buy-in levies (popular at many estates) as well as high monthly rates and taxes could be an additional reason why certain properties do not sell.
In addition, a number of sectional title properties have many owners in arrears with monthly levies, and this affects the financial status of the complex, explains Van Wyk.
Stringent body corporate or home owners’ association rules are another reason why certain properties do not sell.
Quite often restrictions placed on pets are a problem for buyers.
Servitudes and any other property restrictions may limit a buyer from utilising the full extent of the property, for example municipal electricity or sewerage servitudes.
“Minimal marketing efforts, poor photos, poor descriptions and a slow-moving agent could lead to no interest in the property,” says Van Wyk.