Some Sellers wonder if they should hold out for an overseas purchaser who may pay more for their property than a local buyer.
There is no doubt that the weaker Rand has made our property more affordable for a purchaser bringing their funds into the country. In fact, the Rand has depreciated over 20% in the past few months, so in reality, it means a foreign purchaser is saving over 20% on their purchase.
But the fact is that, like all buyers, overseas purchasers buy by comparison. They don’t just look at one property and pay the list price.
They will shop around, and they will research the market. Like all other purchasers, when they walk into a property they will know within a few minutes what it is worth.
It’s important not to forget that overseas purchasers have been even more severely affected by the economic crisis than local purchasers. Consider the problems in Spain, Portugal, Greece, and Ireland –and the fact that the German and French economies have been trying to assist – and you get the picture that Europe is in distress.
The good news is that foreign purchasers are still buying South African property. They are taken by the beauty of this country, the vast opportunities, the natural surroundings of the Western Cape, and the lifestyle we enjoy.
We have noticed a significant trend in the area over the past 5 years, in that, while foreigners still purchase property, they are spending less money by purchasing smaller properties that, while still of a high standard, cost less due to their size.
It’s interesting to note that by far the majority of property in the area is purchased by South Africans.
South African purchasers can finance up to 100% of their purchase, while overseas buyers can usually only finance 50% of the purchase price at best. That means the chances of you selling to a local buyer are far greater than selling to a foreigner.
So, if you are selling, ensure your property is correctly priced. No one is going to pay more than it’s worth. Pay attention to the smaller details and ensure the condition of your property will appeal to all buyers, and they will pay you what it’s worth.