The property market is currently very active, driven predominantly by the historically low interest rate, says Tiaan Pretorius, a property consultant with Seeff Centurion. In this market, sellers may be tempted to increase their asking prices, but this can be a big mistake.
The main draw card of your property is the price, so make sure it is priced correctly and offers value compared to the other hundreds of properties available to your potential buyers, he says.
Naturally, any seller wants the highest possible price, adds Gerhard van der Linde, managing director for Seeff Pretoria East. Sellers may therefore come to their own conclusions about the value of their property based on what they paid, adding thereto any improvements and their perceived growth in value.
They may also consider what they owe the bank and how much they need for their next property. Some may even look at the insurance value and most will look at what their neighbours sold for and add to that as they usually believe their property offers more value.
However, sellers often see asking prices and are then surprised to hear what properties actually sold for. Van der Linde says further that while a seller will want to maximise their price, the true market value cannot be based on these considerations. Comparisons must be made with actual sales prices achieved in the area and with other properties on the market of similar value, condition and amenities that your property will be competing with.
An experienced local area agent should provide an updated CMA (Comparative Market Analysis) based on current sales and competing properties and recommend a correct asking price to achieve the best outcome. The agent should also advise on what to do to improve the desirability of the property.
Value is determined by recent prices achieved based on square meterage, prevailing market conditions and factors such as the number of competing properties. Marketability depends on how ready the property is to sell such as whether it is priced correctly, the level of demand and how it compares to other similar properties.
Sellers should guard against appointing an agent based on a high price promise, especially in this market. You may end up with the highest asking price but least competent agent to achieve the sale. Even in a buoyant market, overpriced properties stay on the market for prolonged periods and may create the impression that there is something wrong with them. Eventually the asking price needs to be lowered to below market value before it attracts attention.
A correctly priced property will attract attention and create competition among buyers which will often result in the best possible price for the seller, concludes Van der Linde.