For most people buying a home will be the largest financial investment they will ever make.
It is possibly going to be their biggest asset and bring them their greatest return on investment over the long term. It is also perhaps one of the few investments that the owner can enjoy and make use of while it appreciates in value. For these reasons it is important for homeowners to put a lot of time and consideration into the inevitable possibility that they will one day sell their home, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
“While it does happen, very few buyers will purchase a home and stay in that same property for the rest of their lives. Although property is a long term investment, a buyer should always buy a home with the consideration that in reality they will eventually sell it. Whatever the time frame, the process of buying and selling should remain the same, with the primary objective being to maximize the return on the investment at the realisation of the sale,” says Goslett.
He notes that in the current market, sellers who want to achieve the highest possible return on their investment will need to follow a certain formula that combines three main elements. These elements are fair market value, an excellent marketing plan and a well presented and prepared home.
Fair market value
The importance of a home that is priced within the correct bracket cannot be overstated, says Goslett. “For a seller to achieve the best possible price for their home, they need to ensure that the asking price is within the correct price range for the market. Many sellers make the mistake of overpricing their property to give them room to negotiate with prospective buyers. While this may have worked during the boom period, it does work in a recovering market that favours buyers. Overpricing will merely chase potential buyers away and result in the property staying on the market for far longer than it should. The longer a property remains on the market, the more profit will be lost,” he says.
Statistically speaking, property sold within the first month of being on the market will sell for the seller’s asking price, provided the home is marketed at fair market value. Thereafter the chance of the property being sold for the initial asking price becomes progressively less likely, with statistics indicating that houses that have been on the market for 24 weeks or more sold for as much as 10% less than the original asking price.
An excellent marketing plan
According to Goslett, some things are better left to the professionals and that is just what today’s real estate agents are. With the significant market developments that have reshaped the real estate industry in recent years, estate agents with years of industry knowledge and experience have become recognised as professionals in their field.
The value added service that an experienced estate agent from a reputable brand will provide in the marketing strategy of the property will be invaluable. They will take photos of the home for sale, list them on notable property search websites, pay for the costs of advertising, arrange viewings and show days and manage offers. Aside from access to all legal requirements and documentation for the sale transaction, estate agents also have a network of contacts and sites that they access to source potential buyers.
“An estate agent’s wealth of knowledge about the ins and outs of selling a property along with a statically proven marketing plan will ensure that the property is sold in the shortest possible time for a fair market value,” says Goslett.
A well presented and prepared home
Homeowners will need to ensure that their home is well maintained and cared for while they live there so that when they decide to sell, the home is ready and looking its best without needing costly upgrades just before sale. Goslett says that homeowners who keep their home updated and organised throughout the years will improve the way they live in their homes and ultimately add to the home’s value.
“First impressions and aesthetic appeal are important when it comes to a property’s resale value. The outside of the property will be just as important as the inside, so sellers should make sure that their home has curb appeal by maintaining their lawn and landscaping. A newly painted home will have a fresh look that will add to the value and interest of the property. Always keep paint colours neutral and current,” he says. “Two rooms in particular that help sell a home are the kitchen and bathroom. They do not necessarily have to be high-end or luxurious. Just updated, clean and well designed is enough. The investment made in these areas of the home can definitely translate into the difference between a speedy and profitable sale, as opposed to a listing that languishes on the market.”
In closing, Goslett says that if a seller follows these guidelines, they will have the best possible chance of realising their home’s resale potential. “Property remains a solid asset class that continues to perform well over the longer term. However, homeowners do have to play their part to ensure that the property reaches its full potential,” he concludes.