With fair market value a priority for today’s consumers, for homeowners wishing to sell or rent out their properties, it is critical that the home is pitched at an accurate, market-related price that will enable it to compete with other comparable properties for sale or rent in the area.This is particularly important in the current market, which is becoming more favourable to buyers.
By its very nature cyclical and consumer-driven, the property market reacts as the balance between demand and supply shifts, so pricing your home right requires expert advice.
Today’s buyers across all price sectors are extremely savvy and research the market thoroughly before committing to a purchase decision, so it’s imperative that a property is not brought to market at an unrealistic price. If you don’t capture the market within approximately the first two weeks, then it’s most likely you’ve lost those prospective buyers.
Bear in mind, buyers are watching market trends and prices achieved to ensure they make informed, intelligent offers.
They tend to have an excellent understanding of the market as they look at stock listed by different agencies. If a seller is asking way over market price, he/she will either not attract the buyers to the house or will elicit an offer way below asking price. To ascertain if the market is dropping, the difference between a well-considered agent valuation and the actual price achieved for a property should be considered, and not the difference between a seller’s wish price and the selling price - as the wish price was not realistic.
It’s a misconception among some that a property should be pegged at a considerably higher price than its market value, to allow for any downward negotiation.
An inflated price might result in multiple price reductions, which ultimately could see the home sitting on the market for much longer. And if you are making some improvements before selling, installing a pool cover which costs R80 000 is not going to add the same value as spending that sum on a new bathroom. Which doesn’t mean to say you can just add up the cost of all improvements and inflate the asking price by the same amount. Overpriced properties stay on the market for longer and normally result in achieving a lower price than if they went to market with a more realistic price.
This is because buyers look out for price reductions and then see this as an opportunity for a bargain, which is detrimental to achieving the best market-related price.
Markets are by their very nature, dynamic, so in the current somewhat slower-paced market - which is experiencing differing levels of activity in different nodes and areas - and indeed in any market, the seller needs to be realistic in pricing in order to attract genuine buyers.
In Durban, we are still seeing a great deal of activity in the market with well-priced homes and apartments selling in the early weeks of marketing, with price being the key determining factor.
Set your price in the context of prices achieved for similar homes sold in the area. Ask your agent for a comparative market analysis.
Some agents try to lock sellers into mandates by overpricing, only to be let down when no buyers visit or a low offer comes in.