Every King/Queen’s home is their castle. But when the time comes to sell the castle, what constitutes best practice when determining a realistic listing price, concluding a fast sale and achieving the best possible return on your investment?
A buyers’ market
It’s interesting that as homeowners, there is a disparity in our expectations of what we believe our properties are worth versus what the market is prepared to pay for them. This is human nature. In a buyers’ market, irrespective of how we may set the price, invariably we have to look at the market indicators to understand whether the market is willing to commit to this price, or not.
Testing the market
While it may be important to test the market, even test it aggressively, it is vital to understand that in terms of buyer behaviour a very short window of opportunity exists to attract the right buyers who will commit. How short of a window? Short. We estimate this at seven to fourteen days, the prime selling period as a property enters the market, interest peaks and the property gains traction. Buyers are the most motivated during this time. There may even be multiple buyers interested, so competitor tension escalates and this is definitely the best time for a transaction. After the first month buyer interest suddenly wanes, declining rapidly. We see this time and again reflected in our Leadhome data.
There are clear reasons for this. If for example, a valuation shows a property to be worth between R900,000 and R1 million, but the seller is looking for R1,2 million – this is an unrealistic expectation. Even if the seller is not in a rush to sell and is prepared to wait in the market for a long period of time hoping to attract a buyer who will purchase an overpriced property, it is still not the correct approach because what essentially happens is as follows:
- The property enters the market with maximum traction and buyer views during the first 14 days.
- During this period the property appears on the first two pages of the portals.
- After 14 days buyer interest decreases exponentially. This can be clearly seen across all our data points and is validated by reduced online views.
- The property’s position is now moving downwards on the portal pages and is therefore increasingly less visible.
- If the price is not adjusted at this point to more realistic market-related levels, where buyers are prepared to commit, more harm than good may be caused.
So the lesson here is that if a property is realistically priced it will sell within a short space of time. That is to say within approximately 30 to 60 days solid offers should be on the table at market-related prices.
Consumer behaviour has changed
We know that consumers are looking at fewer properties before making a purchase. The array of digital property platforms available has empowered super-smart, price-conscious consumers who are able to easily ascertain fair market value by comparing apples with apples. Based on their criteria they are able to quite quickly gauge online whether a property appeals or not. They then narrow this down to the properties they like, and these will be viewed physically and offers made.
So while even an overpriced property may receive views on various websites and portals, the key differentiator is that an overpriced property will receive very little or no foot traffic. As offers are generally made on property that has been physically seen, without foot traffic through a property it’s very unlikely that buyers will commit. People simply won’t waste their time going to look at it. Bottom line: if you don’t get feet through the door, you simply won’t sell.
Want to know more? Read part two of this two-part conversation: How to dive into the right buyer pool and get sold faster than you can say Leadhome Properties!
For more information, please contact:
For more valuable advice, insights and information, please visit our Selling & Buying Guides, Leadhome Blog and FAQs
