‘For agents working in the current market, it’s about navigating their challenges as efficiently as possible to make a sale.’
The real estate market is influenced by a number of external factors such as fluctuating interest rates, and market valuations.
For those new in the business of selling properties, these factors can hinder success, if not understood.
Lynne Krawchuk, CEO of Under One Roof says since real estate went largely online, agents face some old challenges as well as some new ones.
Challenges in the estate market
Krawchuk says they put together a number of agents and asked them about the needs of local real estate practitioners. From their survey, they found that the major obstacles to gaining profit are the dominance of major listing platforms, compliance with the Financial Intelligence Centre Act (Fica) and other regulatory requirements.
The other obstacles that they have found are the current market downturn and financially constrained buyers.
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Online listings
She adds that standard online listing platforms while making properties more accessible and visible to a larger market, erode agents’ revenues due to the high cost of placing a home or commercial building for sale on the sites.
“Especially for smaller agencies, the costs of covering all bases on the dominant platforms can be prohibitive, and if the listing is not exclusive, differentiating one post from another can be a significant challenge.”
Fica compliance
She is of the view that for smaller agencies who do not have administrative support staff, completing and compiling all the documents required for buyers and sellers to be Fica compliant can be laborious and time-consuming.
“If clients are not up to date with what they need, the process can go very slowly and this can delay completion of a transaction and payment of commission to the agent.”
One of the respondents in the survey noted that there are no shortcuts when it comes to Fica compliance, therefore it is important to expect delays in the finalisation of a sale.
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Market conditions
South African estate agents are facing a slow real estate market, with fewer buyers willing to extend themselves and fewer sellers willing or able to take a loss on a property bought during more buoyant times.
“High interest rates and inflation are obviously shaping buyer behaviour and impacting sales volumes,” said one agent.
Krawchuk says they have noticed that properties take longer to sell, and sellers are having to revise their prices downwards, all of which impacts on estate agents’ earning capacity.
Cost-conscious clients
“Both buyers and sellers in the property market are looking to minimise costs where they can, including negotiating estate agency commissions and related fees,” she says.
She adds that agents have to be more flexible in order to secure a listing, especially if they are looking for an exclusive mandate.
“For agents working in the current market, it’s about navigating their challenges as efficiently as possible to make a sale.”
Krawchuk warns that the local property market is likely to remain challenging for the foreseeable future.
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