As an estate agent, you've probably done everything in the book to market your listings. Yet, even with all the right moves, you might find that your "For Sale" signs are still gathering dust. And you aren’t alone. According to the latest FNB Property Barometer, properties remained on the market for an average of 12 weeks and two days in Q2 2024, up from 10 weeks and six days in Q1 2024. Prop Data reached out to property practitioners to find out what’s behind this real estate agent nightmare and ways to overcome the situation.
Factors putting the breaks on property sales
“Affordability is definitely a major factor keeping homes on the market for longer,” says Magda Stoffberg, Owner/Principal at REALGLEN Properties. “With the high cost of living, buyers, especially those relying on salaries, find their disposable income shrinking, making it harder to commit to a purchase.”
Also agreeing, Johan Meyer, Licensee at Seeff Pinelands, says it’s always about price. “Price overrides everything. If the location is poor, price is a factor. If the condition is poor, price is a factor. If the property is too small or too big, price plays a role.”
Despite this, Meyer still sees sellers making the same mistakes when it comes to pricing their homes. “They base their prices on their needs or what they see other homes advertised for and not what the market is prepared to pay. We have found that in our area if you get the price right, you have a number of serious buyers and often the property is sold for more than the asking price. If you get the price wrong, buyers will not even consider making an offer.”
“There is a large disparity between what sellers feel their properties are worth, and what the market is prepared to offer,” says Aaron Grant Ruiter, Group Operations and Technology Manager at Harcourts Rhino. “This overpricing is largely due to the post-COVID property boom we have seen in recent years. The interest rates lowered significantly, fueling a flood of buyers to the market, most significantly, women buying property and many first-time homeowners.”
Financial uncertainty and higher interest rates also remain a challenge for the property market. “Our prime lending rate increased faster than sellers could adjust their take on reality in terms of their home’s value. There is increased financial pressure on buyers who are currently in the market. While the large banks kept up a healthy appetite for lending, they did, however, adjust their qualifying criteria. Qualified buyers were less abundant, and this was also a factor that influenced time on the market,” says Ruiter.
Besides financial constraints, Ruiter believes poor property presentation is turning away potential buyers. “We have seen an increase in the number of poorly maintained properties coming to market. Additionally, there are also a lot more sellers in financial distress who have engaged the banks’ Easy Sell programmes to take advantage of the financial assistance the banks afford these sellers experiencing financial difficulties.”
Ruiter says another challenge is the increased competition in the market. “Real estate agents will undoubtedly find homes sitting on their market as it is harder for individual properties to stand out.”
Estate agents are rolling up their sleeves
Despite the challenges posed by a sluggish housing market, property practitioners are demonstrating remarkable resilience and embracing every strategy in their toolkit to get properties sold. In July 2024, Prop Data polled property practitioners to find out which are the main sales options being explored. The results found:
83.4% say they re-evaluate the listing price
52.2% say they increase their marketing efforts
40.8% say they redo the listing description
28% say they explore alternative sales channels
25.5% say they encourage property improvements
3.8% say they offer buyer incentives
3.8% say they employ other strategies (e.g. auctions and marketing videos)
Commenting on the results, Meyer says it’s clear real estate agents favour a price re-evaluation when homes aren’t shifting. “It must not be left too long otherwise the property becomes stale. Buyers are very aware of market conditions and view many properties so they are clued up with what is correctly priced.”
“Unsurprisingly re-evaluating the listing price is the top choice, reflecting the importance of market alignment,” notes Stoffberg. “Increasing marketing and redoing the listing description are also crucial, showing the need for a fresh approach to attract buyers. These strategies together emphasise the need for adaptability and proactive efforts in a challenging market.”
“The results do indicate a multifaceted approach is often necessary to successfully sell a property that has been on the market for an extended period,” says Ruiter. “Re-evaluating the listing price is crucial, as an overpriced property can deter potential buyers. Increasing marketing efforts and redoing the listing description are also effective strategies; they help to refresh the property’s appeal and reach a broader audience. Harcourts, particularly Harcourts Rhino, excels in these areas, offering featured listings and leveraging decades of experience to secure top prices quickly, often below the national average.”
While less commonly used, Ruiter encourages practitioners to consider alternative sales channels, especially in a competitive market. “Strategies like auctions and marketing videos can be powerful tools in the right circumstances. Harcourts South Africa, for example, is the pioneer in the market for non-distressed residential property auctions. We consistently achieve higher-than-average prices in as little as four weeks in the market to conclude a successful sale on auction.”
Breaking free from a property sales rut
Despite the tough economic climate, property practitioners still have plenty of options to find success. “Get the price right early and you’ll see the difference,” says Meyer. “You wouldn’t want to spend money marketing something which is unlikely to sell and the reason we are able to sell our properties on average in under 39 days.”
“Property practitioners should stay adaptable, emphasise the value of their listings, enhance marketing efforts, and maintain strong client relationships for referrals and repeat business,” urges Stoffberg. “Networking with other agencies is crucial — sometimes collaborating can lead to quicker sales — half an egg is better than an empty shell.”
According to Ruiter, real estate agents should have a sales plan that can ensure they don’t fall behind. “Understanding market dynamics and economic trends is vital for making strategic decisions. Pricing properties competitively through regular market analyses ensures alignment with buyer expectations. And improving property presentation through staging and minor upgrades can make a big difference,” he says.
Leveraging technology has also proven to be effective at Harcourts. Virtual tours and online marketing, for example, have helped our property practitioners broaden their reach and attract more potential buyers,” shares Ruiter.
Having the backing of a fast-growing real estate company like Harcourts can also help property practitioners reach their sales targets, says Ruiter. “Being part of a large successful organisation allows for opportunities one would not get in a small company.
For example, a large team means that almost the entire buyer pool in the current market will already be in contact with one of the many property practitioners in the organisation. This allows for an internal and national referral network within the company. No stone will be left unturned.”