By Cyril Nii Ayitey Tetteh
As we inch closer to December 7, 2024, the date for Ghana’s general presidential and parliamentary elections, a number of property investment analysis have come up.
For instance, in the last couple of weeks, my colleagues and I have been asked in different settings and at different times, whether it is a good idea to buy or sell a property during this election period. For some reason, there is this believe that one can get a steal during this time.
This is founded in the belief that with the uncertainty of new policy directions by an incoming government, some land lords or property hunters will be in a hurry to either dispose or acquire new properties to hedge against possible unfavourable policies in the near future.
Then there is also another group of investors who believe that with the possibility of policy and economic changes, it is better to adopt a wait and see approach by holding off deals until after the election.
While this “insight” is yet to be proven, there are however clear advantages and disadvantages in doing a deal around the election period, be you a landlord or property hunter. Here a few pointers.
THE ADVANTAGES
For Sellers
Less competition – With many buyers adopting a wait and see approach, some private vendors and real estate developers typically slow down on promotions with the belief that the election campaign is a distraction not worth competing with. This provides an opportunity for aggressive sellers to position themselves to match the demand of potential buyers
Reduced sales turnaround time– With many potential buyers adopting the wait and see attitude, the likelihood of enquirers who come forward and are serious leads is higher in these times. The turnaround time in prospecting and closing is quicker, hence time and energy saved to focus on other operational matters.
For Buyers
Greater bargaining power– Usually, serious buyers who want to snap up a property quickly during this period are likely cash buyers who are not prepared to go through a possible long drawn mortgage process. When you are buying with cash, you are in a stronger position to negotiate more favourable deals, thus a greater bargaining power.
THE DISADVANTAGES
For Sellers
Reduced pool of leads – With potential buyers holding off, sellers are put in a position where buyers have higher bargaining power and thus may be forced to provide discounts or reduced pricing they ordinarily wouldn’t have had to make.
Restoration of market certainty – After elections, market uncertainty usually tends to dissipate, particularly if interest rates and policies remain stable. This can result in a renewed confidence amongst a host of potential buyers, thus increasing the pool for competitive offers which sellers may miss should they sell around the election period.
For Buyers
Reducing due diligence period– Beyond doing a title search at the lands commission or title registry, testing out the land or property requires time. Testing the property may require a “sold” signage put on the property to draw out any possible litigations which may affect the transaction.
These things take time and might be worth waiting rather than making a quick decision that may end up being costly in the end, should there be issues of encumbrance.
Possibility of buying overpriced properties – In one’s rush to get good deals, especially from a reduced pool of inventory, there is always that possibility of buying an overpriced property if the decision is time based and thus hunters may not have widened their search enough for competitive comparison.
IN THE FINAL ANALYSIS
Property purchases are one of the big decisions we make in our lifetime and it demands a cautious approach that requires a fine balance between timing and risk in order to get a good deal.
Attempting to time the market perfectly can be a risky venture. For sellers, selling off too quickly against the thought of an uncertain future might in the end prove to be a rush decision, if your worst fears aren’t realized and rather the market improves as well as the pool for competitive offers.
For buyers, it is absolutely crucial to get both the pricing and the legals right, hence the need not to rush but rather undertake the necessary due diligence and search cautiously but also timeously. The point is, while it is great to look out for bargains, it is important not to overthink and overanalyze to the point of making a bad investment.
The writer is the Executive director of Yecham Property Consult
& Founder of Ghana Green Building Summit.
Email: [email protected]
Linkedin: Cyril Nii Ayitey Tetteh
