A seller's guide to pricing their property correctly
Category Expert Insight
Does it matter to you at which price your property sells? For most sellers, this is not only important but often the most important factor!
Andreas Wassenaar, Seeff's Licensee and Principal at the Zimbali office, says for those sellers who want to achieve a sale at the highest market value possible now, there are some key pricing fundamentals to consider and work through with their appointed agent.
"The most important advice to a seller is to never select an agent based on their estimate of the price for your home.
Never have a price discussion before selecting the agent you would like to work with. Select your estate agent based on their knowledge and expertise, their professional approach and their strategic marketing plan presented for your property.
The agent can only provide an estimate of the market price. They may end up being wrong and markets may change due to unforeseen events.
At whatever point the property market is within its cycle, the following five points are provided to sellers to assist them in pricing their homes correctly and thereby giving themselves the best chance at realising a sale.
1. Use an impartial evaluation of market activity as the most effective way to estimate your property's selling price. This assumes that you have already selected the realtor you intend to work with and together you explore the market activity.
Using a comparative market analysis (CMA) as an excellent tool, you can identify properties most similar to yours that have recently traded. This process will also highlight competition in the market. As a seller, you need to understand which other properties a buyer will be looking at. Of those properties currently on the market which have been on the market for over six months?
Time on the market is an indicator of overpricing and even though this period lengthens as you move up the price spectrum, there is a real danger of a home becoming stale and being discriminated against by the active buyers in the market.
2. A seller will have to accept that the value of their home is determined by what a buyer is willing to pay for it in the current real estate market.
Value is therefore not determined in any way by the length of time the seller has owned the property, or by the amount of money spent on the property or even by what the seller may need to purchase their next home.
These are irrelevant in establishing today's value for the property. In the greater Ballito market for instance, prices have been flat for the past three years across most price brackets. The lower brackets have experienced the greatest positive growth, while the highest levels have experienced negative growth.
This may be hard sometimes for a seller to accept and will then force the discussion around their motivation to sell or to hold.
3. The longer a property remains on the market the higher the probability that the eventual selling price will be substantially lower than the original asking price.
Regardless of the market you find yourself in, in any geographical location around the world, this remains true. Pricing the home correctly from the outset, therefore, becomes critically important.
If your home has been on the market without success for more than six months then it is time for a breather. Relisting the home with revised imagery as if it was a brand new listing is a strategy that can work to keep things fresh.
4. Carefully consider the three key elements that impact the sale of a home: price, condition and location.
Once you are happy with your gross asking price, explore how to present the home in showroom condition. If your agent recommends de-cluttering, take this advice seriously and start throwing things out - not only can it be very therapeutic, but you may even start to enjoy your new minimalist surrounds!
5. Be discerning where you source your pricing information from.
Whether it is from competing estate agents attempting to talk the price up to secure a mandate or from a neighbour who believes they have a gifted insight into the property market, evaluate all information objectively and with caution.
A correctly priced home with a motivated seller and focused and committed estate agent has every chance to realise a transaction in almost any given market.
Author: Andreas Wassenaar