While sellers look to achieve the best
price for their home, home buyers and investors are savvy
and street-wise, researching the market to gain a good perspective on
properties on the market in their preferred suburbs and are only prepared to
pay realistic, market-related prices.
buyers have easy access to a wealth of information and so they are well
educated regarding the residential property market and do their homework before
committing to a purchase.
a home to sell requires a subjective view of the property
Sometimes people start at the 'wrong'
end and work backwards, by looking at how much they've spent on the property
and what they'd like to achieve for it.
advisable to consult a qualified and experienced agent in the area who knows
what prices have actually been achieved for comparable homes in the recent
often hear: “I'm upgrading to a larger home and I need my house to sell for
RXXX otherwise I won't be able to acquire the property”
suburbs have a ceiling price, which obviously fluctuates with market
conditions. A suburb's ceiling price can best be ascertained by an area
specialist, based on historical knowledge of the area and backed up by data such
as a lightstone report, with information on residential property transactions
registered at the Deeds Office - as well as other data sources across the
country's residential property market
the costs of building and renovating exceed that which can realistically be
obtained in the market place, then this is over-capitalisation. However,
over-capitalisation can be reduced by capital growth achieved over the time
that the property is held
professional knowledge, together with commitment by the seller and agent on a
sole mandated marketing drive, will deliver the best results for the seller and
services where agents deposit the stock in a common pool and have no
accountability, invariably result in time lost and the seller having to accept
the lowest price from competing agents.
misconception is that simply considering asking prices of properties advertised
for sale provides a good idea of what these properties are actually worth.
these properties have not yet sold, the asking prices may be too high, and some
of them may have been sitting on the market for some time.
should rather look at properties, which have sold, and this is where a
professional estate agent comes in. A reputable agent with a sole mandate on a
property will not - as some may incorrectly assume - put a low value on a
property in order to sell quickly.
correct market-related price will ensure that your home is priced to sell.
- As a starting point, consult an experienced
and qualified agent in the area to conduct a comparative market analysis of
similar homes, which sold recently in your neighbourhood.
- While using the CMA as a basis, the
general market activity, sentiment and many other economic factors must be taken
into account in assessing the current value, which is where an experienced
agent's skills come to the fore.
- Also, many properties have an emotional
draw and it is not unusual for beautiful furnishings or a lovely garden to
attract a premium price over the similar but less appealing house in the same
more buoyant the market, the greater a role the emotional factor can play.
order to get the best selling price, a seller will also need to pay attention
to the preparation of the house to ensure it is appealing and well-presented
within its price bracket before embarking on the sale. In this way, potential
buyers are presented with the 'best buy' in terms of value in your price band
is especially relevant in the current market, as stock in popular or high
demand areas are in short supply, which means that buyers are literally waiting
to see what new stock comes onto the market. This makes correct pricing crucial as the buyer pool is in action in
the first two weeks of the mandate being listed and launched to the
marketplace, so if you don't capture that market, then you've lost those buyers.
And the last thing you want is for your property to sit on the market for a
lengthy period and then become 'stale', as buyers know when a home is
over-priced or remaining unsold, in which case they dismiss this property and
true that every property has more than one price. Firstly, what the seller
thinks its worth, what the agent values it at and what the buyer is prepared to
offer. Then, of course, there is the final settlement price.
fact that the demand exceeds the supply tends to narrow the margin between
ceiling and asking price and may even eliminate the margin completely when
comparative offers result in the asking price being exceeded.
in the luxury or high end category of the market also have their own views on
what they want for the property and often one has to test the market at a very
optimistic price and gauge the market response. Even the most experienced agent
may be incorrect in their assessment and there is also a high degree of
subjectivity, especially with unique or iconic properties and in an environment
of market fluctuation.
guideline, the following factors need to be taken into consideration:
you paid for your home has nothing to do with its present value
- The price you would like to achieve for
your home doesn't control the asking price
- The value other agents put on your
property is not always accurate
- What a valuator says your home is worth
doesn't determine the price in the market
- The current market determines the value
of your property.
Bear in mind that if your property is
over-priced, it loses prospective buyers and eliminates offers, and also limits
financing, which can eventually lead to a lower price.
is a misconception that multiple agents marketing a property will result in a
- This is not the case, as agents prioritise stock, which is marketed
on a sole mandate - a method which is most likely to achieve a better price for
For example, we sold properties for
full asking price as the homes were correctly priced.
- As a result we had two and even three buyers competing for them, which served to
drive up the price.
- Where multiple agencies have listed a
property the seller is at a
disadvantage as the agents
compete with one another rather than focusing on achieving the best
market-related price for the seller
BizCommunity 29 Jan 2015