Property hunt experience: Jhb

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Sideshow Bob

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I would like to know your take on this. I am not sure if this is common experience. We started to look for new townhouse cluster sometime ago. Generally this is how it has been happening. We call up agent, set up appointment to view. On day of view, some of the agents (and occasionally owners) tell us either that
1. There is already an offer and transaction is in process but we can put in a backup offer so long.
2. Next time you call them, property is apparently sold only to find 2 weeks later that it is back in market because offer fell through. We think that lot of creative reasons are being employed here.
3. On saying that property is rather highly priced, they seem to agree but insist that seller will not accept anything less than listed price (max 20K reduction on a 1.6Mil house)

Status of property is not changing to 'Offer pending' or 'sold' on websites like property24/privateproperties What I don't understand is how come most of the properties are almost 'sold' just 2 days after we view the property. These properties have been on market since December. Unless people have started coming back from leave and started putting in offers left, right and centre.

Any thoughts?
 
Standard tricks of the trade. They try to play on your emotions by giving you a sense that you are about to lose the property (before you've even acquired it ;)) so that you will make a hasty decision.

For all property decisions you need to do your best to make your decisions and offers while ignoring these types of things from the agents.
 
I've been having the same experience. Some agents will even say that there are 2 or 3 offers on the table, yet they continue pushing you into making an offer. Must be their sales "strategy".

I've decided not to rush my purchase though. I've been keeping track of how long prospective properties have been on the market. I'm hoping that some sellers would be willing to settle for a lower price 3 months down the line.
 
Yeah , seems like standard M.O.
Also find that selling price is usaully between 8 - 15% of asking price .
 
While there is probably allot of sales tactics around the last 2 people I know that sold their houses had a whole bunch of offers that fell through.

I dont know if people are trying to impress their stukkie on the side or just dont know what they can afford.
 
The unit I've been staying in for a year and a half went up for sale last February. The owner got 3 agents to sell the place and for about 4 months there were people coming and looking at the place ATLEAST 3 times a week. The agents kept telling the people that the owner won't accept a lower offer (as in #3 above) and that there were offers on the place already but they could put them in to.

After the 4th month the owner gave up on selling the place and one of the estate agents casually mentioned that there was only ONE offer on the place in all that time, so yes it does seem to be a trick that agents play to get people panicked about the time they have on buying a place.
 
There is a well-known property purchasing slump in December, so anyone who first posts a property for sale in December is desperate :)

I always start the bidding at asking price less 10% unless I know better e.g. the agent once mentioned that the reason for the sale was that the owner needed the money to purchase a business: my bid immediately dropped to -20%.

BTW the percentage increases the longer that the property has been on the market.

Finally, cash is king. Have your bond pre-approved, any existing properties sold etc. Then you tell the agent that it is a cash deal, i.e. bargain from a position of strength.

NB: a minor tip: insist that the agent present the offer to the seller. If it is a low offer a less-than-reputable agent won't present the offer to the seller. OTOH, if the seller has a 'clean' signed offer they may well accept.
 
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rrh said:
There is a well-known property purchasing slump in December, so anyone who first posts a property for sale in December is desperate :)

I always start the bidding at asking price less 10% unless I know better e.g. the agent once mentioned that the reason for the sale was that the owner needed the money to purchase a business: my bid immediately dropped to -20%.

BTW the percentage increases the longer that the property has been on the market.

Finally, cash is king. Have your bond pre-approved, any existing properties sold etc. Then you tell the agent that it is a cash deal, i.e. bargain from a position of strength.
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Some solid advice here
 
The key is to find an agent that you can trust and actually like - that is harder than finding a property, but sometimes you get lucky. Referrals also help. Then just stick with that agent and keep looking until you find what you are looking for.
 
Be informed

Also be informed - it sounds like you know what you're looking for, so use some paid services to get info from reliable sources:

You can get detailed reports about the property in question on sites like these
http://www.privateproperty.co.za/property-index.htm (look at the sample report, it's worth the money: http://www.privateproperty.co.za/PropertyValuations/freereport.htm)

http://www.lexisnexis.co.za/our-solutions/private-sector/risk-management/deedsearch.aspx

etc...
You can see when the current owner bought the place, how much he paid at the time, how much other properties in the same area/complex really sold for recently etc.

For Cape Town there is a site - http://web1.capetown.gov.za/web1/gv2009/ - where it shows the current municipal valuations for all properties in the City. I don't know if JHB has the same, but I've found this to be a great free tool to see what neighboring properties are valued at, growth over time, etc.

I have found that showing this information to agents commonly gets them to take you more seriously.

Also remember that, by law, an estate agent has to present every written offer to the owner. As such, if you really like a place, and you put in an offer for the asking price -20%, the agent must present it to the owner. The agent should have no influence on the amount you write down in the offer. Remember, the seller can come back to you with a counter offer. It is supposed to be a negotiation - who starts negotiating at the asking price? The worst is that the seller does not accept your offer. If you then really still like the place, you may want to offer asking price -10%. The agent will try to influence you at every chance they get.

Additionally I have found that agents try to push for offers with a validity of +-14 days. I think this is simply so they have time to try to raise more offers from other buyers. Having made 4 offers in the last 2 years (and being involved in successfully buying 2 properties in the same time), I have learnt to ask for an offer that only stands for 48 hours. Unless the agent has a good reason (owner being overseas or something), why do the seller need more time to decide? Either they like your offer or not?
 
On any place offer 1Mil, pull a property report on a site like prop IQ. Will show previous transactions on said property and sales of similar properties in the area. (also shows owners name) :p
Also make sure your financials are in order to get the loan as fast as possible.

Make a offer 10-20% less than the sales price. (Even if it sounds ridiculously low. They can only say no.) Make the offer and leave it at that. Don't get emotionally involved in the decision. Also look at the area's surrounding to see what going on in the property market there.
There is currently still more sellers than buyers. (and a lot is desperate)
Make it clear to the sales agent that their price is way out of line with current market conditions. Also mention the other houses for sale in the same area, that's cheaper/better. Which is true. Also play the estate agents against each other.
Two can play this game :twisted:
 
klaas said:
Additionally I have found that agents try to push for offers with a validity of +-14 days. I think this is simply so they have time to try to raise more offers from other buyers. Having made 4 offers in the last 2 years (and being involved in successfully buying 2 properties in the same time), I have learnt to ask for an offer that only stands for 48 hours. Unless the agent has a good reason (owner being overseas or something), why do the seller need more time to decide? Either they like your offer or not?
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+1
That sounds like very good advice!

Edit:
Also, you must personally view the property before making a offer. And take a lot of pictures. You see things in them later which you miss at first glance.
Also mention every single thing that's not right with the house.
 
wow, thanks for all the response guys. Thanks to mybroadband forum search results, I got a free site municipal evaluations site - gives stand size/location/owner name etc. (http://ims.joburg.org.za/joburg/ - however, these prices tend to be rather undervalued IMO). I have also registered on www.windeed.co.za to get property related reports -quite a detail one - This is no indicator but at least one has something one can compare against. I think people/agents have rather high expectations of what their property is worth.
 
I've had extensive training in non-verbal communication. Body language if you will. Very easy sign when an estate agent is lying is too look at their mouth, as soon as the lips move you know it's a lie. Same principle can be applied to politicians.
 
RexxGrim said:
I've had extensive training in non-verbal communication. Body language if you will. Very easy sign when an estate agent is lying is too look at their mouth, as soon as the lips move you know it's a lie. Same principle can be applied to politicians.
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I lol'd :)

spiderz said:
JHB GIS information - shows municipal values.
http://web.joburg.org.za/IMS.nsf/user?OpenForm
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Thanks for this - it only seems to work in Internet Explorer, On Chrome & FF I can't get past the disclaimer...

raoul said:
wow, thanks for all the response guys. Thanks to mybroadband forum search results, I got a free site municipal evaluations site - gives stand size/location/owner name etc. (http://ims.joburg.org.za/joburg/ - however, these prices tend to be rather undervalued IMO).
Click to expand...

I think the market value you see here is the value the property is taxed on by the municipality. It is probably outdated by 3-5 years, or more, and does not really consider cost of building the specific property in itself, beside sqm in size etc. Perceived/real market value could be much higher due to demand in the area or other reasons. It is however very useful to see how the property you are looking at compares to other in the same street, suburb or to others in differents suburbs where you are hunting.
 
klaas said:
I think the market value you see here is the value the property is taxed on by the municipality. It is probably outdated by 3-5 years, or more, and does not really consider cost of building the specific property in itself, beside sqm in size etc. Perceived/real market value could be much higher due to demand in the area or other reasons. It is however very useful to see how the property you are looking at compares to other in the same street, suburb or to others in differents suburbs where you are hunting.
Click to expand...

With that being said, It's still a bargaining point. And a real bargain if you can pay less that the municipal valuation.
Bought my place at about 3/4 of the Municipal value, but it does have a bit of work ... :D
 
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