Agent success in distressed properties

11 Dec 2012

Home sellers who have fallen on difficult times remain prime real estate clients and deserve the same level of service as any other buyer or seller.

This home in Poortview is on sale through Aida Roodepoort. It has four reception rooms, three bedrooms, a study and panoramic views. It is one of only four homes in a secure estate.

This is according to Charl Els of the Aida Roodepoort franchise and his opinion is obviously one which resonates with clients, because he has shot to prominence in his local market over the past two years.

He has been named among Aida’s top three selling agents in the country twice, despite the fact that he runs a small, two-person operation. Els attributes a large part of his success to the fact that his franchise is very active in marketing distressed properties. "Mandates issued by the four big banks for the sale of properties under pressure represent about 15 percent of our listings currently."

He says although reserve prices of distressed properties are 80 percent of market value, they consistently achieve at least 95 percent of market value. "On top of that, we sell 75 percent of all the properties we list on bank mandates.”

He says tough economic conditions affect homeowners in all property classes. They have mandates for homes across all price ranges, from R350 000 to R2 million and it's an indication that consumers in all income brackets have been affected by the recession and the tough financial situation since then, as many forced sales are due to bondholders losing their jobs and regular income.

But, he says sellers who have to liquidate their properties remain bona fide real estate clients. "Our view is that in spite of current circumstances such clients deserve the best possible service."

Their approach is based on four considerations. The first is to achieve a fair price as soon as possible to allow the seller to consolidate his financial position. The second is to accept reasonable offers that represent up to a 5 percent discount on market price to expedite the transaction to the benefit of the seller, the buyer and the bank.

The third is to actively market distressed properties as close as possible to current market value, to ensure market statistics are not distorted and, fourthly, they realise distressed sellers' circumstances may change and they may well become clients again in future.

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