One of the main reasons why a property doesn't sell or takes a long time to sell is because it is priced too high.
If you are considering selling your home you may be wondering how to settle on an
asking price for your property.
Pricing to sell
Pricing your property realistically at a market-related price is one of the most
important factors for a successful sale. Buyers shop for a home by comparing
your home to other properties on the market - both in terms of price, position
and what the property has to offer. Starting with a realistic asking price
creates a demand and allows you to maintain your negotiating advantage. It is
important to remember that price is the main negotiating factor for your buyer
and that the first impression makes all the difference.
The pitfalls of over-valuation are that unrealistic pricing results in
over-exposure and prospective buyers are quickly lost. If you receive little or
no interest in your property there is a good chance that your price is too high
with the danger being that your property may become stale. This wastes valuable
marketing time, creates much stress and ultimately if the sale becomes urgent
you may end up accepting an offer at a much lower price.
If you are deciding whether to sell privately or use an estate agent you should
always be careful of an unscrupulous agent promising you an unrealistic price.
They may want your sole mandate so might be telling you what you want to hear.
It is advisable to stick to one method of marketing your home. If you choose to
sell privately through Private Property then give it at least two months before
exploring other avenues. Marketing your home through a number of channels can
end up giving buyers mixed messages, which is something you should definitely
avoid.
Your first offer is often your best offer. Be careful not to assume your
property is under-priced. In many cases early offers are turned down and sellers
eventually end up selling for less.
Tips for helping you establish the price of your property
Online valuation tool
Many people rely on an estate agent to guide them, but what do you do if you
have decided to sell privately?
If you decide to sell your home privately through Private Property, a consultant
will provide you with a comparative market valuation to help you establish what
price to market your property at. This includes a SPI (Sold Price Index) report,
which is Deeds office information, as well as data on properties in the street
or area that have recently been sold through Private Property.
Anyone can use the 'Price it right' on www.privateproperty.co.za - simply click
on the link on the left side of the page and you will be able to find out more
about the service and also view sample reports.
For a small fee of R34 per report, which can be paid online using your credit
card you can select one or more of these reports: Street History, Suburb
Transfers, Suburb Proclaimed Town Transfers and Sectional Title Scheme Report.
These reports only give you information on properties that have already been
sold. They do not give you a breakdown of the property features, but are useful
in helping you establish what properties in your suburb, street or complex have
recently sold for. You would need to match this information with your knowledge
of the area and the research you have done on similar properties that are
currently on the market. In other words, compare attributes that the property
has to others on the market.
By using this and other information in the report, you will be able to gauge the
current market value of similar properties in the area, so that you don't
overprice a property you want to sell or pay too much if you are buying.
Local knowledge
Local knowledge of the area is a useful starting point and it is helpful to
begin by comparing the property you are interested in to other similar
properties in the area. Look at newspapers, property magazines and property
websites to get some idea of what the asking prices are for homes with similar
features in the same area. Visit show houses in the area to gauge how similar
properties on the market compare.
Another good way to determine a market-related price for a particular property
would be if you identified five properties for sale in your area with similar
features and compared the asking price. Somewhere in the middle or slightly
below would be a good place to start in setting the price.
Added value features
Identify the distinguishing features that the property you are interested in
has, such as four bedrooms, a flatlet, brand new kitchen, study and so on. Then
look at what the property offers that could be considered to offer 'extra
value'. All these 'extra' features can be assigned a monetary value. For
example, what would it cost to add on a fourth bedroom and third bathroom? What
would it cost to build on a study or add on an entertainment area?
With a general market slowdown in progress it is even more important to make
sure that you price your property right the first time. John Loos of FNB
Property Finance says that the second quarter FNB Property Barometer indicates
that 75% of homes are currently being sold below their asking price and that the
average time it takes to sell a house is now 10 weeks. So do your research, get
to know your local area, and when you put your property on the market make sure
the price is realistic.