The best way to boost your home’s sale is to start with the right price tag. Buyers tend to shop in a price bracket that they can afford, so, you must get the optimal price from the get-go.
But the valuation of a property can be tricky. As a homeowner, you know how much time and money you’ve spent on your property, and you possibly have a rough idea of how much you would like to sell your home for. Especially if you have compared home sales in your area.
It is key that you price your home right for the market you are selling in. And because estate agents work with property and know the local market, they are often the best resource to help you establish the real market value of your home.
To price your home right, you have to understand how home values are calculated and what elements play a role. Here are four factors you cannot ignore:
Location of your home
Your house might be to-die-for, but if it’s in the wrong area, you could face issues when trying to agree on a fair market value.
Time of the year
There are buyers throughout the year, but sales volumes will go up and down throughout the year. This is referred to as seasonality.
Seasonality pertains to the variations in sales due to natural elements, for example, the weather. It is also linked to other times of the year when fixed holidays or school terms may cause buyer and seller activity to fluctuate.
Market conditions
For most of us, our property is one of our biggest investments. And what happens in the economy, reflects in the property market. So, it is critical to assess the market you are entering. Property sales look very different when there isn’t a lot of stock on the market versus a market where buyers are spoilt for choice.
Competition
At the end of the day, the true market value of your home is determined by what a buyer is willing to pay. If you list your home at a competitive price, the interest among buyers may conclude with you receiving more than your listing price.
Location
When it comes to establishing the market value of your property, location can be more important than even the size of your home. Think back to when you bought your property and remind yourself of what drew you to this area.
- Is there a good infrastructure?
- What is your property’s proximity to schools, shops and places of work?
- Are there any parks or recreational facilities in the area?
- Can you easily access highways and public transport?
These are questions buyers will be asking you so as to assess whether the neighbourhood suits their needs.
Also, consider the safety and security of your area. Property prices are certainly affected by the crime in the neighbourhood when it becomes time to sell.
Timing
Although there are buyers every day of the year, certain periods do see an increase in buyer activity. And more buyers may well influence the market value of your home.
The weather influences consumer behaviour. Sales typically tend to cool as the days grow colder. But this doesn’t mean you shouldn’t list your home in winter. The benefits of selling your home in the colder months include more serious buyers who will brave the weather and attend viewings. You could also find yourself with fewer properties to compete with.
In South Africa, spring arrives late in the year. The holidays aren’t upon us yet, and the seasonal changes get people eager for change. During the warmer months, homeowners may benefit from the general increase in potential buyers.
Market Conditions
Supply and demand shape the price of a product, and it is also true for property prices. When you have a lot of sellers, there’s a lot of stock and buyers can pick and choose. Lots of stock counts in favour of buyers and that is why this kind of market is referred to as a buyer’s market.
The market you want to sell in is a seller’s market, because yes, you guessed it, a seller’s market favours sellers. Homes listed in a seller’s market often sell quickly and for a higher selling price.
But a buyer’s market doesn’t mean your home won’t sell, it just means you have to price it appropriately.
Competition
Most homebuyers will look at properties that are within a price range they can afford. Your property has to be priced at a level that is competitive with similar properties on the market. This will create the impression of good value and increase the response time from buyers. Basically, the right price tag will create FOMO.
Buyers often do a more thorough comparative market analysis of properties in the neighbourhood than any seller. If a property is not priced correctly, a buyer will ignore it. But if a property is priced right, you might find yourself with various interested buyers who have to bid against each other, resulting in more money for you.
Additional factors to consider when pricing house for sale
It is important to consider the possibility that a sole mandate can help a seller achieve the highest possible sale price. This way buyers compete against each other and not agents. When there are competing agents, they might persuade a seller to decrease the price just so they can close a sale.
Summary
One of the biggest concerns when selling your home will undoubtedly be to find out how much your property is worth. Especially when entering a buyer’s market as you cannot afford to step into the trap of unrealistic pricing.
Property valuation can be a complex and difficult process, but it doesn’t have to be.
It is clear. If you want the best way to boost your home’s sale, start with the right price tag. Buyers tend to shop in a price bracket that they can afford, so, you must get the optimal price from the get-go.
It is key that you price your home right for the market you are selling in. And because estate agents work with property and know the local market, they are often the best resource to help you establish the real market value of your home.
