Overpriced properties sit on the market for longer than necessary
Homeowners who put their properties on the market are obviously looking to get the best possible returns on their investment but they also need to ensure their homes are priced right.
A vital aspect of selling a home is its listing price, so having a sound pricing strategy is essential to find the right buyer, says Adrian Goslett, regional director and chief executive of RE/MAX of Southern Africa.
“Regardless of whether the market favours buyers or sellers, sellers need to price their property accordingly to ensure they attract the right buyers.
“In today’s age of readily available data, buyers are savvy and educated with regard to property pricing and fair market value.”
According to Goslett, sellers should avoid these six common pricing mistakes:
The most common pricing mistake homeowners make is inflating their listing price to counteract buyer negotiations. There is also the matter of emotional attachment to the home, says Goslett, explaining that many homeowners perceive their home to be the best in the neighbourhood and set a price that is relative to the value they perceive. However, buyers may not see the home’s value in the same way.
“An inflated price will leave out strong potential buyers, especially if statistics and sales figures of other properties in the area don’t support the asking price. The seller will run the risk of multiple price reductions, which could have the home sitting on the market for longer than necessary.”
Disregarding recent home sale prices
Often the selling price varies from the initial asking price and to gauge fair market value and arrive at an asking price that will generate buyer interest, sellers must base their price assessments on what other homes in the area sold for, not what they were listed for.
Not considering online search parameters
Nine out of 10 buyers start their home search online and it is crucial to consider this when setting an asking price.
“Property search portals require the user to enter a price range to narrow down their search options. If the asking price is R755000 and the buyer’s price range is R700000 to R750000, the home will be missed. By listing the property at R750000, there will be a greater chance of capturing potential buyers in the ranges above and below the asking price,” Goslett says.
Not open to negotiation
Deals die quickly if the parties are not open to negotiating.
“Staying steadfast on the asking price, or other conditions, could mean that the seller is in for a long and bumpy ride during the selling process. Sellers may need to decide whether it is more important to get the full asking price and have the home on the market for longer or make a few concessions and close the deal.”
Not considering agent’s insight
An agent will have access to resources and information that the homeowner will not, and will base their assessment on facts and figures. An agent will be able to provide an unbiased opinion, looking at the situation from all angles, such as the home’s features, the local market, recent sales and more, Goslett says.