Myths about selling your home during a recession
Category Seller Advice
Don't let myths about selling your home in tough economic times stop you from selling your property.
Some people might tell you that it's impossible to sell your house during recession or that you'll have to let go of your property at a loss. You might even get told that renting out your house is your only option.
Don't let these rumours scare you off from getting the best deal for your asset. Selling your house during an economic downturn might not be easy, but it's definitely possible. Not only that, but it's often the best option if you're in a financial tight spot or have an ageing property that no longer suits your lifestyle.
Get your facts straight and all the information you need to find the right buyer for your home:
Three myths about selling your house during a recession
Myth 1: I'll get less for my home than what it's worth
It's best not to make this assumption about your property because many factors influence the amount that buyers might be willing to offer for your home. With the right estate agent by your side and some patience, you could still get the right price for your property.
It is true that a recession typically results in many home being sold for less than the price they would fetch during more stable market conditions. There are, however, many ways to mitigate this challenge.
The first step is to have a realistic expectation of the value of your home. NS Property Solutions expert property practitioner Estelle Saayman suggests getting a valuation of your home from a trusted estate agent.
"An experienced and reputable agent will help you price your property correctly. Choosing a trustworthy realtor is especially important during a recession. The market is more competitive during these times, and inexperienced estate agents might promise you a higher price just to ensure they get your business."
Once you've set a reasonable asking price, it's vital to come to an understanding of how long it might take to sell your home. When the economy is weak, consumers are less likely to spend big, but that doesn't mean people stop buying homes altogether. There are simply fewer potential buyers, which means you might have to wait a bit longer to get the offer you want.
If you can afford to hold on to your property for a while longer, it will be worth the wait. Use this time to do essential maintenance so your home makes a good impression on buyers. Lean on your realtor to keep you updated on interest in your house and to advise you on strategies for improving the visibility of your property listing.
Not sure you have the right agent? Contact us to find out how we've helped hundreds of homeowners get the best price for their home.
Myth 2: It will take longer to sell my property
While this is sometimes the case during a recession, the opposite has proved true during South Africa's recent economic downturn at the height of the COVID-19 pandemic.
"The interest rate is usually low during a recession, which will make it easier for potential buyers to obtain a bond," notes Estelle. "We found that interest rate cuts have given many people access to affordable home loans, which helped reasonably priced properties get sold quickly in 2020."
She says that homeowner experiencing financial difficulty should definitely consider selling rather than holding on to their homes during a recession. "You run the risk of the house being sold on auction."
A significant benefit for homeowners who sell their home in an economic downturn is that they then have the funds to find a more suitable home in a reduced property market. In short, you're likely to find a house that suits your needs and get it at a lower price.
Estelle warns sellers not to be too hasty, though. Following the right processes and trusting a proper estate agent to sell your home remain essential, and even more so when the economy is affected. "In a recession, you run a greater risk of a successful offer being withdrawn at a later stage because buyers are more likely to get retrenched or run into financial difficulties."
But with the right realtor and the right buyer, your home might sell as fast or faster than it would have sold at any other time.
Myth 3: I should rent out my house because no one wants to buy now
Common sense says that more people will sell and opt to rent a home during tough financial times, but the rental market in 2020 told a different story.
The TPN Vacancy Survey Q3 2020 showed that vacancies increased in 2020, with the demand for rental homes in South Africa drying up as the year progressed. The registered credit bureau predicted that "high vacancies will be the new norm".
With the property market taking these unexpected turns, it's best to speak to your estate agent about your options before assuming you'll have no chance of selling your home. The right realtor will give you insight into current market conditions and honest advice on what to expect. It's quite possible that letting go of your house might actually cost less and be less effort than trying to find tenants now.
Already struggling to get tenants for your property? Watch out for these tell-tale signs that it's no longer worth it: Three signs you need to sell your rental property now
Getting the right price at the right time for your house during a recession takes planning and expertise but it can be done. If you're ready to find out what you could get for your home, request a free valuation from us today.
Need honest advice? Get in touch with us now for guidance from a property expert in your area.
Author: NS Property Solutions