A key theme for the property market in 2017, will be smart pricing according to Samuel Seeff, chairman of the Seeff Property Group. We have seen the market contract in 2016, demand has dipped in line with the slower economy, more property listings are coming through and buyers now have more to choose from.
As the market pendulum shifts towards buyers, the challenge will be on for serious sellers to realise that they are now competing with other properties and will need to set their asking price expectations at the right level, he says.
The right price is that which will attract buyers and offers. There is a difference between the municipal value and the market value. The former is the value that the local municipality attaches to it for the purposes of charging property taxes while the latter is the value that a willing buyer attaches to your property. In other words, says Seeff, it is the price that you will get for your property in the open market.
This selling price tends to differ and no two houses sell for the same value, unless it is a new development. Many factors come into play. It is often tempting to look at what other houses in your area are selling for and to then think that your house could sell for a similar price and that you may be able to make quite a handsome profit.
Seeff however, says that valuing a property and pricing it when you want to sell, is a specialist skill. It is a task that is best left to an expert property agent in your area and should include consideration of a range of factors that affect the value and price that a buyer may be willing to pay for your home.
Each house in a suburb is different in terms of the location, the views, the finishes, the size of the home, the size of the land, garden and other added extras. It therefore follows that each house is unique with a unique value attached to it. You can therefore often find two houses in the same street selling for different prices – one may for example sell for R1.8m while the neighbouring house could sell for R2.3m.
If you are looking to sell, always guard against giving a mandate to the agent that promises you the highest price. That is not the smart way to sell as any successful seller will tell you, says Seeff.
If you go to market at a too high price, you will waste time as buyers will simply go to another property or they will wait until the price comes down, it is that simple.
Research has also shown that properties that start at a too high price tend to sell for less compared to what they would have if the price was set at the correct market level in the first instance. You also risk buyer fatigue.
A Comparative Market Analysis (CMA), an analysis that compares your property to other comparable properties that have recently sold in your area, is a vital tool used by estate agents to assist sellers to determine the right price or value range for their property.
The CMA will typically include the following information on the prices fetched by similar properties in your area, how long they were on the market, what is currently on the market in your range and which properties are not selling due to being over-priced.
We cannot over-emphasise the risk of selecting an agent purely on the promise of a highest price or lowest commission, says Seeff. You will find yourself tied to an agent for a period of time and could incur possible cost implications should you decide to switch to another agency.
Look for an agency and agent with a credible and verifiable track record that can be trusted. Facts and figures do not lie. Above all, select an agent who is sensitive to the market. They know that an asking price that is too low disadvantages the seller, while a too high price will alienate potential buyers.
The ability to read the market is vital in providing an accurate gauge and price range aimed at leading to a successful sale that satisfies both the buyer and the seller.