'Property price cuts send the wrong message'

Listing your home at an unrealistic price will not only see your property sit on the market for an inordinate period of time, but you may end up having to cut your price which will send the wrong message to buyers, says Tony Ketcher of Seeff Randburg.

"Unfortunately, uninformed sellers are still too often swayed by low commission offers and the promise of a high sales price."

"Despite the fact that there is healthy demand, especially in the sub-R2 million price band, we are called in time and again by desperate sellers whose properties have been sitting on the market without success."

This, he says, highlights the role of a credible real estate agent that not only has a strong track record, but is active in the market and who knows what is in demand and how much buyers are prepared to pay.

Pricing is a fine art and one that only an agent who knows the area can really provide guidance. They quite often have re-sold some of the homes a couple of times over the years and know that price is not only about plot size and bricks and mortar, but that design, features, modernity and more come into play, says Ketcher.

"If a home is priced under market value or lower than similar properties on the market, it is likely to attract multiple offers that will drive the price up to market value, says Ketcher. There is thus little real danger that your home will be priced too low."

"It is also not in the interest of an estate agent to try and sell your home cheaply; they have their reputation to consider. Rather, the danger lies in overpricing. For example, if you want R1 million for your home, but there are ten similar properties on the market priced at around R900,000, then the odds are really stacked against you and yours is a one in eleven chance of success."
"Listing your home at the wrong price may also put you at a disadvantage when it comes to web searches for example. Say, you list your property at R1,1 million, but really hope to get offers around the R900,000 mark, then yours is unlikely to catch the eye of potential buyers if they for example search for properties priced below R1 million."

Going to market at the right price is important at any time, but more so during a buyers' market, adds Ketcher.

"The internet and access to information means that buyers are savvy about market conditions and prices and do their homework. It is better to give an agent leeway to negotiate as the seller is likely to see more success. More often than not, the first offer is always the best offer. We are for example currently marketing a home where the seller wants R2,1 million and has turned down two offers at R1,8 million and R1,9 million respectively. This, despite the fact that the home has attracted 279 potential buyers on show days with no higher offers. Here, the market is telling us that the real market value lies somewhere between the R1,8 and R1,9 million mark."

"The reverse is also true for buyers; always ensure that you pay fair market value and guard against paying too high a price unless you intend holding onto your home for a good couple of years."

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