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In a buyers’ market, why correctly listing your property is so important

26 October 2021 | Insights Team

Every King/Queen’s home is their castle. But when the time comes to sell the castle, what constitutes best practice in determining a realistic listing price, concluding a fast sale and achieving the best possible return on your investment?

Leadhome Properties’ Principal, Harry Hattingh, joins the conversation.

A buyers’ market

It’s interesting that as homeowners, there is a disparity in our expectation of what we believe our properties are worth versus what the market is prepared to pay for them. This is human nature. We are currently in a buyers’ market. This means that 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 I think that it’s important to test the market, even test it aggressively, it’s 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. Seven to fourteen days. This is the prime selling period, as a property enters the market, interest peaks and the property gains traction. Buyers are motivated, there may 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 the 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, it is an unrealistic expectation. Even if the seller is not in a rush 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 right 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 35 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 have 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. This they then narrow 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 the 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 to go and look at it. 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: 

 +27 10 590 3088

hello@leadhome.co.za

Properties for sale

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Insights Team

We're the "thinking arm" of Leadhome, combining expertise in data analysis, modelling, sociology, geography, and philosophy to interrogate current trends in the South African residential property market. Proudly contemplative since 2015.

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