Determining a Sales Price
Category Advice
Whilst a home is exactly that; a space to live and raise a family in, it is also an investment. With the proper care and improvements that investment appreciates over time and can be sold at a profit. The question is how to determine the right selling price; make it too high and the house won’t sell, make it too low and there goes your profit.
Factors to Take into Consideration
The Timing
As they say timing is everything and that goes for putting a property on the market as well. When buyers are plentiful and the properties in an area are few, the chances are better of a house selling for a higher asking price. Of course the converse is also true and an area with too much stock will likely see houses selling for far less as buyers are spoilt for choice.
Location, Location, Location
That brings us to the location of a property. “A home or flat in a highly desirable area will always be in demand and, will steadily increase in value”, says Jan le Roux, CEO of Leapfrog Property Group. Purchasing a property in an area that is becoming dangerous or inconveniently located will make selling the property hard. Of course, spotting an area that’s on the verge of new development can make a good profit – the trick here is time. Areas do improve over time and so will the property prices but, you may have to wait decades to get your asking price, or sell at a loss.
Condition
A home in excellent condition with the required amenities (and perhaps a few extra) will almost always sell for a better price. Ensuring that your property is in good nick will go a long way as buyers will pay more for a home that doesn’t need a lot of necessary renovation. It’s worth making sure your property is at its best before putting it on the market. “A number of buyers are looking for fixer-uppers but, at bargain prices. If you want to get the best price, you have to maintain the property”, believes le Roux.
The Joneses
Any good estate agent will tell you to look at your neighbour’s homes and what they have sold for. Asking for a price that isn’t anywhere near what properties in the area are selling for is a sure fire way of scaring off buyers. If all the houses in the area are selling for between R1.5 million and R3 million, a buyer won’t look twice at an asking price of R5 million.
If all three factors are in your favour; meaning you are selling at the right time (and preferably don’t have to sell), have a property in a good condition, in a favourable location you’re that much closer to getting your asking price.
However, le Roux emphasises that “sellers need to be realistic when it comes to their asking prices. Properties that are priced accurately are selling, even in the current market. The best advice is to keep emotion out of your decision making when settling on an asking price, rather relying on what properties are going for in the area and what the market is doing”.
Author: Leapfrog Property Group
