Look at the ‘small picture’ to get past price confusion

In recent months, there has been a lot of contradictory – and thus confusing – information about home prices emerging from the banks and other regular market commentators.

But there is a way to get a clearer picture, says Berry Everitt, MD of the Chas Everitt International property group.  

Writing in the Property Signposts newsletter, he notes: “Some commentators say prices are rising, some that they are falling and some that while prices are rising the rate of growth is declining – all of which is a bit bewildering for homebuyers and sellers.

“However, all this really shows is what we already know, that is, that the market is always in flux and that home values in each sector and each area are shifting all the time, in response to a whole variety of local factors.

“This is why it is essential for homebuyers and sellers to be able to look in as much detail as possible at the ‘small picture’ – or the current market value of the specific property they are interested in buying or selling – as well as the big picture of macro-economic trends and regional forecasts.”

For a home seller, Everitt says, market value equates to what a capable buyer is willing to pay for his property right now (not what that buyer might have paid last month or would perhaps be willing to pay next month), and the closer the asking price is to that immediate value when the home goes on sale, the greater the likelihood of a quick sale.

“For buyers, of course, market value largely equates to what they can afford, and most will be very anxious not to overpay. They want what they perceive to be the best value for their money, even if it sometimes means giving up on an area where they initially thought they would like to live.”

So for both parties, he says, it is essential to be able to access the most recent and most detailed, unbiased information available about the specific area, close neighbourhood, street, estate or complex before they decide to sell or buy. “This should include but not be limited to recent comparative home sales, and is exactly the type of information that our agents are now able to provide through various bank buyer qualification programmes.

“Through these programmes, buyers can also get bond approvals-in-principle while sellers can access independent home valuations, and even assistance in finding a new home that is good value for money among the banks’ distressed sale listings. In a word, they are excellent, and already having a major influence on the way property is bought and sold in SA.”

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