Report by Andre de Villiers - Chas Everit franchisee for Cape Town's False Bay, Constantiaberg and Southern Suburbs territories and National Brand Manager.
It has been five years since I last did a thorough analyses of where the buyers came from for sales from my four Cape Town offices, that cover the area from Cape Point to Mowbray.
The exhaustive analyses completed is for the twelve months ending June 2008. It significantly shows that the growth in internet responses now dominates results.
For the period 1 July 2007 to 30 June 2008 the results are;
49% INTERNET / WEBSITES
8% LOCAL PRINT MEDIA
7% FOR SALE SIGNS
26% SHOWHOUSES
9% OTHER (Mostly office walk ins)
(A previously recognised category “Referrals” that accounted for 7% of all buyers has been excluded from analyses and the source of the referral identified and included in the above 5 categories)
Compared to five years ago the figures were;
17% INTERNET / WEBSITES
28% LOCAL PRINT MEDIA
8% FOR SALE SIGNS
29% SHOWHOUSES
11% OTHER (Mostly office walk ins)
7% REFERRALS
The actual investment in print media has actually not changed much as a % of my marketing expenses and I believe this to be true for most other real estate businesses. At a time that the market demands a more prudent allocation of resources and lowering of operational costs it can be argued that the continued significant expenditure on print media is to appeal to seller's expectations and for purposes of branding the company and agent.
Monday, August 11, 2008
Friday, July 18, 2008
Call for State to address expropriation fears
Government needs to move fast to allay fears that its new expropriation legislation will not be used to justify Zimbabwe-style land grabs.
That’s the call from Berry Everitt, MD of the Chas Everitt International property group, who says: “I have no wish to be alarmist, but the Expropriation Bill, which was due to be enacted last month but has been withdrawn by Parliament’s legal advisers, definitely does ring some warning bells.”
There are four major problems with the Bill, he says, the first being that it provides for property to be expropriated “in the public interest” rather than for a specific “public purpose” such as a road, a dam or a school, which was previously the case.
The second problem is that the new legislation would work on an “expropriation first, arguments later” basis, giving property owners who wished to contest an expropriation no option but to fight a costly rearguard action through the courts – quite possibly after they had already had to leave their property and accept whatever compensation the State was willing to offer.
“Thirdly, the new legislation would remove the power of the courts to decide whether the time and manner of the expropriation or the amount of compensation paid was fair. They would only be allowed to decide if the expropriation had been in the public interest or not – and given that the legal process is slow, that decision could come months or even years after the event,” says Everitt.
And fourth, he says, the Bill provides for the “market value” offered by the State for an expropriated property to be determined solely by the expropriator, without reference to the property owner, a valuer or any other independent consultant.
“In short, if the Bill were to be passed it would put the rights of the State ahead of those of the individual, which are supposed to be protected by our Constitution. The security of property ownership would effectively be subject to the whim of government officials.
“What is more, many people are worried that the term ‘property’ in the legislation could be interpreted to mean anything material, including mines, businesses and urban buildings as well as farmland. This would obviously be very discouraging for the international companies and foreign investors that SA is trying so hard to attract.
“And coming now on top of rising interest rates, the rocketing cost of living, the energy crisis and high crime, this legislation might just prove to be the last straw for anxious SA consumers. It is likely to evoke very strong responses that could quite easily cause even more people to emigrate - and take with them the skills this country urgently needs.
“So we believe government should to take the opportunity before the Bill is passed to openly address the fears that have been voiced and clearly explain what it hopes to achieve through this legislation.”
That’s the call from Berry Everitt, MD of the Chas Everitt International property group, who says: “I have no wish to be alarmist, but the Expropriation Bill, which was due to be enacted last month but has been withdrawn by Parliament’s legal advisers, definitely does ring some warning bells.”
There are four major problems with the Bill, he says, the first being that it provides for property to be expropriated “in the public interest” rather than for a specific “public purpose” such as a road, a dam or a school, which was previously the case.
The second problem is that the new legislation would work on an “expropriation first, arguments later” basis, giving property owners who wished to contest an expropriation no option but to fight a costly rearguard action through the courts – quite possibly after they had already had to leave their property and accept whatever compensation the State was willing to offer.
“Thirdly, the new legislation would remove the power of the courts to decide whether the time and manner of the expropriation or the amount of compensation paid was fair. They would only be allowed to decide if the expropriation had been in the public interest or not – and given that the legal process is slow, that decision could come months or even years after the event,” says Everitt.
And fourth, he says, the Bill provides for the “market value” offered by the State for an expropriated property to be determined solely by the expropriator, without reference to the property owner, a valuer or any other independent consultant.
“In short, if the Bill were to be passed it would put the rights of the State ahead of those of the individual, which are supposed to be protected by our Constitution. The security of property ownership would effectively be subject to the whim of government officials.
“What is more, many people are worried that the term ‘property’ in the legislation could be interpreted to mean anything material, including mines, businesses and urban buildings as well as farmland. This would obviously be very discouraging for the international companies and foreign investors that SA is trying so hard to attract.
“And coming now on top of rising interest rates, the rocketing cost of living, the energy crisis and high crime, this legislation might just prove to be the last straw for anxious SA consumers. It is likely to evoke very strong responses that could quite easily cause even more people to emigrate - and take with them the skills this country urgently needs.
“So we believe government should to take the opportunity before the Bill is passed to openly address the fears that have been voiced and clearly explain what it hopes to achieve through this legislation.”
Tuesday, July 15, 2008
Be Professional & Tell it as it is!
Andre de Villiers - Chas Everitt Cape Regional Chairman
The client is not your friend! Just like the family needs their doctor the family needs their real estate agent to 'give it to them straight' and yes - with compassion when it's needed.
Today I came back from visiting my agent's show houses in my area, and the one property I called in on was way over what it should be on the market for - even when times were on the seller's side!
It was clear to me that my agent who is an enthusiastic charming and polite lady is having a problem telling the seller what she needs to hear. The seller (who has already complained about the size of the display ad we gave her) has over capitalised on the property and maintains a very personal attachment to her home and has a high regard for the value of her improvements. My agent needs to take the facts of the market and equate them to the selling price of comparable properties but I see the problem - the seller clearly does not believe her house is comparable to any other property in the area.
There is no easy answer to over capitalised properties but one thing is to ask the seller that if they knew when they were spending the money that they would be selling would they done so? The answer is hopefully "no" and then the follow up question of course being "why?" and hopefully the seller then says something like "because we probably won't get our money back". Hello!
Some fixtures can be removed and taken by the seller to their next property. Encourage this as it starts a process of real quantification of the values as in many cases the real value to the subject property for the item is very little as it is a matter of subjective personal taste and preference. This property for example had three precast water features in a tiny garden and encouraged me to find out where the loo was after being there for two minutes.
Removing the item from the sale will allow the seller to maintain some 'victory' in the price adjustment and may be a great relief to there buyer! For the seller it allows them to rationalise a drop in price. Quantifying the second hand value of items also gets the seller to start looking at the itemised value and not the total package that seems to encourage the overwhelmingly optimistic comparison of their home to the next door neighbour's property!
The point is we need to be firm on competitive pricing or we do the seller no favour at all. Too often estate agents are overly concerned with the seller's ego and think that if we do not share their 'dream vision on price' they will think we are unenthusiastic. That's like going to the doctor when you have tumor and respecting his professionalism because he chooses to go with your opinion that you just have a headache when he knows better. Is that the type of doctor your seller wants? Ask them!
The vast majority of sellers who are over priced know it! They are playing a game and they have you to play with! As long as the agent 'plays the game' we encourage (at our and our company's great expense) everyone to waste their time and to lose valuable selling opportunities by driving potential buyers into the arms of the house and agent around the corner!
Not being truthful with our over priced sellers is a dishonest disservice to them and to ourselves and nobody has anything to gain.
Andre de Villiers - Chas Everitt International (Southern Suburbs and False Bay) Cape Town South Africa
The client is not your friend! Just like the family needs their doctor the family needs their real estate agent to 'give it to them straight' and yes - with compassion when it's needed.
Today I came back from visiting my agent's show houses in my area, and the one property I called in on was way over what it should be on the market for - even when times were on the seller's side!
It was clear to me that my agent who is an enthusiastic charming and polite lady is having a problem telling the seller what she needs to hear. The seller (who has already complained about the size of the display ad we gave her) has over capitalised on the property and maintains a very personal attachment to her home and has a high regard for the value of her improvements. My agent needs to take the facts of the market and equate them to the selling price of comparable properties but I see the problem - the seller clearly does not believe her house is comparable to any other property in the area.
There is no easy answer to over capitalised properties but one thing is to ask the seller that if they knew when they were spending the money that they would be selling would they done so? The answer is hopefully "no" and then the follow up question of course being "why?" and hopefully the seller then says something like "because we probably won't get our money back". Hello!
Some fixtures can be removed and taken by the seller to their next property. Encourage this as it starts a process of real quantification of the values as in many cases the real value to the subject property for the item is very little as it is a matter of subjective personal taste and preference. This property for example had three precast water features in a tiny garden and encouraged me to find out where the loo was after being there for two minutes.
Removing the item from the sale will allow the seller to maintain some 'victory' in the price adjustment and may be a great relief to there buyer! For the seller it allows them to rationalise a drop in price. Quantifying the second hand value of items also gets the seller to start looking at the itemised value and not the total package that seems to encourage the overwhelmingly optimistic comparison of their home to the next door neighbour's property!
The point is we need to be firm on competitive pricing or we do the seller no favour at all. Too often estate agents are overly concerned with the seller's ego and think that if we do not share their 'dream vision on price' they will think we are unenthusiastic. That's like going to the doctor when you have tumor and respecting his professionalism because he chooses to go with your opinion that you just have a headache when he knows better. Is that the type of doctor your seller wants? Ask them!
The vast majority of sellers who are over priced know it! They are playing a game and they have you to play with! As long as the agent 'plays the game' we encourage (at our and our company's great expense) everyone to waste their time and to lose valuable selling opportunities by driving potential buyers into the arms of the house and agent around the corner!
Not being truthful with our over priced sellers is a dishonest disservice to them and to ourselves and nobody has anything to gain.
Andre de Villiers - Chas Everitt International (Southern Suburbs and False Bay) Cape Town South Africa
Upgrading in a Buyer's Market is a Great Opportunity!
- Andre de Villiers - Regional Chairman - Chas Everitt Cape Region
We are all familiar with the saying, “A rising tide lifts all boats” and the truth is the reverse applies just as well.
Sellers in a depressed market can be left with little comfort and it's hard to find a silver lining for a financially stressed seller who is selling and downgrading but this does not apply to the seller that plans to upgrade.For those who can afford it, it could never be a better time to upgrade and it's simple maths but most sellers don't see the advantage to them when they buy because they are so intimately involved with what they have to sell to move on they can't see beyond the emotion of their selling price.
The agent needs to spell out that selling in a strong buyers market has many opportunities to the upgrading buyer. Let's take a simple scenario of a seller who is selling for R1 000 000 and buying for R1 750 000 and let's say the estimation is that prices are 15% down on what they were, then the R1 000 000 house will sell for R850 000 (a loss of R150 000 to the seller) but as the R1 750 000 house is going to sell for R1 487 500 (down R262 500) the upgrading buyer scores a R112 500 - 'thank you very much!'
The key to this is obviously for the seller to put himself into the strongest negotiating position he can, and that is a cash buyer needing a modest mortgage finance. You are not in a strong position if you are still trying to buy up with a 'subject to sale' contingency!
Increasingly we see sellers who missing the boat and the opportunity to move onwards and upwards because they are so fixated with not selling below a increasingly mythical target!
While we accept that the price of oil, gold and equities rise and fall we tend to fight so much harder against the reality of the real estate market's moves. With all the readily accessible data available to home sellers (and buyers for that matter), resistance to the inevitable price reduction makes little sense.
There is confusion between the value of the property and the value of the home. Get the seller to separate them more clearly in his mind and realise the home goes with them and we are 90% of the way to letting go of the emotional obstacles to more realistic pricing.
We are all familiar with the saying, “A rising tide lifts all boats” and the truth is the reverse applies just as well.
Sellers in a depressed market can be left with little comfort and it's hard to find a silver lining for a financially stressed seller who is selling and downgrading but this does not apply to the seller that plans to upgrade.For those who can afford it, it could never be a better time to upgrade and it's simple maths but most sellers don't see the advantage to them when they buy because they are so intimately involved with what they have to sell to move on they can't see beyond the emotion of their selling price.
The agent needs to spell out that selling in a strong buyers market has many opportunities to the upgrading buyer. Let's take a simple scenario of a seller who is selling for R1 000 000 and buying for R1 750 000 and let's say the estimation is that prices are 15% down on what they were, then the R1 000 000 house will sell for R850 000 (a loss of R150 000 to the seller) but as the R1 750 000 house is going to sell for R1 487 500 (down R262 500) the upgrading buyer scores a R112 500 - 'thank you very much!'
The key to this is obviously for the seller to put himself into the strongest negotiating position he can, and that is a cash buyer needing a modest mortgage finance. You are not in a strong position if you are still trying to buy up with a 'subject to sale' contingency!
Increasingly we see sellers who missing the boat and the opportunity to move onwards and upwards because they are so fixated with not selling below a increasingly mythical target!
While we accept that the price of oil, gold and equities rise and fall we tend to fight so much harder against the reality of the real estate market's moves. With all the readily accessible data available to home sellers (and buyers for that matter), resistance to the inevitable price reduction makes little sense.
There is confusion between the value of the property and the value of the home. Get the seller to separate them more clearly in his mind and realise the home goes with them and we are 90% of the way to letting go of the emotional obstacles to more realistic pricing.
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