Buyers and sellers should never take a ‘one size fits all’ view of the property market. News reports are constantly being released discussing the property market in general and how certain areas are once again basking in the glow of high sales and increasing prices. While this may be true, there are areas that are still struggling to regain their footing and where buyers remain somewhat thin on the ground.
Demand drives property prices and for this reason, there are many areas in South Africa which seemed to escape one of the biggest recessions the world has ever known. Some areas may have felt the effects a little more, but given the ongoing demand, the ill effects were short lived and it was soon back to business as usual. Other areas however, have yet to recover and those selling where there are hundreds of listings but very few buyers continue to bear the brunt of a devastating financial breakdown that started thousands of miles away across the Atlantic Ocean.
Sellers in these areas need to pay extra attention to the pricing of their homes. In a nutshell, if there are some 500 similar properties listed at a similar price, the overpriced homes are not going to sell. Why on earth would anyone be willing to pay a premium for a particular home when they can not only find something cheaper, but nine times out of ten, find a seller who is willing to negotiate on the final selling price?
It may well be a bitter pill to swallow but sellers unwilling to see reason should consider removing their homes from the market and waiting for better days. And indeed, better days will come. The property market is a little like a roller coaster and the old saying that what goes up, must come down always applies.
No one can force a seller into pricing their property correctly. Some sellers are of the firm opinion that estate agents deliberately under value homes in order to make a quick sale. If this is true, and it may be fair to say that some agents do push the professional boundaries, it is fairly easy to find out what a similarly priced property in the area is selling for.
Forget about basing your price on what other sellers are asking. Remember that just because Joe Blogs at the end of the street has his home on the market for an exorbitant price doesn't mean that the property is ever going to sell.
Do research, but make sure you are getting the cold hard facts. Before you take any advice on pricing, ask your agent to show you a comparative marketing analysis (CMA). This invaluable information is garnered from sites dedicated to recording statistics and will give you a clear indication of how many properties, across the price spectrum, have been sold in any given area.
Perhaps most importantly, do not listen to rumours. Unfortunately, some sellers are prone to exaggerating the price they achieved for their homes. Listen to their stories by all means, but take the time to double check the statistics to see if what could well be a bit of a tall story is actually true.
Market your home at the right price in any area and it will sell, regardless of the prevailing market conditions. Don't, and you could be left sitting with a home that no one even bothers to view, never mind taking the time to make a serious offer to purchase.