Distressed properties an 'important market'
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.
That's the view of Charl Els of the Aida Roodepoort franchise who is very active in marketing distressed properties.
"Mandates issued by the four big banks for the sale of properties under pressure represent about 15% of our listings currently.
"And although reserve prices of distressed properties are typically about 80% of market value, we consistently achieve at least 95% of market value. On top of that, we sell 75% of all the properties we list on bank mandates."
He says tough economic conditions affect homeowners in all property classes. "We have mandates for homes across all price ranges, from R350 000 to R2m. That's a clear 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. Our 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% discount on market price to expedite the transaction to the benefit of the seller, the buyer and the bank.
"The third is that by actively marketing distressed properties as close as possible to current market value, market statistics are not distorted and, fourthly, we realise that distressed sellers' circumstances may change and they may well become clients again in future."
Aida Press Release