Why pricing your home according to the portals may never see it sell
Contrary to what you think you know, pricing your house according to the listing price of other homes on property portals in your suburb or street is a bad idea. This is because, just like you, your home is unique. No two homes are exactly the same – even the cookie cutter kind are each unique (the sunlight may fall differently on one than it does its neighbour, the orientation may suit one buyer better than the neighbouring unit).
With this said, your home is not the best thing since sliced bread (insert your favourite idiom here). When selling your home, it is not you who will be setting the asking price; it’s the market. What ever the market is prepared to pay for a home is what it will sell for.
There’s a good reason why Cape Town property is so much more expensive than similar Johannesburg homes: the price benchmark has risen and so has market acceptance.
Sure the lifestyle is great, the landscape is beautiful, the metro receives more unqualified audits than Zuma does no-confidence votes, and, and, and…
The sad reality is that the bigger they are, the harder they fall – Cape Town house price inflation has already shown signs of slowing and it’s only a matter of time before the buying public is either unable or unprepared to pay more than it currently is. On the Atlantic Seaboard, it’s not unusual anymore to pay more than R100,000 per square metre; in fact Seeff agents along the gorgeous coastline predict R200,000 per square metre is more than attainable in the not-too-distant future.
And this is why, as the pool of eligible, deep-pocket buyers gets smaller and smaller, house prices either need to match the lower offer or get off the market.
The difference between asking and selling price is much narrower in Gauteng than it is in the Cape; the upcountry buyer, therefore, has greater negotiating power and he (or she) knows this already.
So, I digress. If you only take one piece of advice from this article, it is this: interview multiple agents, get a comparative market analysis done, purchase a Lightstone report and…more importantly…after considering all price suggestions, think like a buyer.
Would you still, after getting advice from suburb experts as well as hard data, still pay more for your home than what the market says it will? The R2m, three-bedroom house up the street has been on the market for six months already. Unless an uninformed buyer (probably not a HomeTimes reader :)) ends up paying full price for the overpriced home, that seller will have to drop his asking price – and, as we’ve all seen, that home will have a pretty little banner across its photos saying “Price reduced”. Now, you do not want that to be your home.
Serious buyers ask a lot of questions, and they have seen that guy’s house every day on their favourite portal for the past few months and then suddenly the price has been dropped. “Why?” they ask themselves. And they may just end up answering their own question: “Probably something wrong with it.” And that will be that. Next listing.
You, however, read this advice, consulted widely and took all emotion out of the transaction: You want to sell and you do not want to wait six months to do it – least of all after swallowing your pride and announcing to the online world that the price has been reduced.
So, price right and sell your home. It’s really quite simple.