Although improving, the property market remains largely favourable for buyers while sellers have to compete for the limited pool of buyers in a market which is generally still overstocked. While pricing is important in any market, it is especially so in this market, according to Samuel Seeff, chair of the Seeff Property Group.
Since the listing process starts with the asking price, the seller will often think that setting the price at the highest possible level will get you better offers closer to the desired price.
In reality, says Seeff, there is simply no evidence that shows a higher asking price will result in a higher selling price and actually has the opposite effect by putting buyers off from the outset.
There are a few fundamental factors to consider when trying to obtain the highest possible price when selling your home, says Andreas Wassenaar of Seeff's Zimbali office.
1. Choose the right agent
In Wassenaar's view, a seller should not select an estate agent merely based on the estimate of the price they claim to be able to obtain for your home.
"Select an estate agent based on their knowledge and expertise, their professional approach and their strategic marketing plan presented for your property," he suggests.
2. Consider market conditions
The value of a home is determined by what a buyer is willing to pay for it in the current real estate market.
3. Get the pricing information
Whether it is information from competing estate agents attempting to talk the price up to secure a mandate or the view of a neighbour claiming to have insight into the property market, evaluate all property market information objectively and with caution, suggests Wassenaar.
Rather use an impartial evaluation of market activity.
4. Do a comparative analysis
Carefully consider the three key elements that impact the sale of a home, namely price, condition and location.
Using a comparative market analysis (CMA) is a good tool, according to Wassenaar. In this way you can identify properties most similar to yours that have recently been sold. This will also highlight competition in the market.
5. Consider time on the market
The longer a property remains on the market, the higher the probability that the eventual selling price will be substantially lower than the original asking price.
If, however, your home has been on the market without success for more than six months, then it is time for a "breather", in his view. Relisting the home with revised imagery as if it was a brand-new listing is a strategy that can work to keep things fresh, in his view.
6. Don't price yourself out of the market
Seeff says this is a weak strategy which will have the opposite effect. Today's buyers are informed and aware of market conditions and prices. They will simply overlook an overpriced property in favour of those which are correctly priced.
7. Don't believe hype about rising prices
With so much written about the market, often by people who are not local experts, it is easy for sellers to get caught up in the hype of rising prices.
8. Renovation isn't everything
While some improvement of an older property may well be advised, you should take care not to overspend and overcapitalise.
9. A quick offer doesn't mean you under-priced
The objective of selling is to get a good offer as quickly as possible, says Seeff. Receiving an offer soon after listing means that the property is on the market at the right price to attract buyer interest.
10. Don't wait for a better offer
Research has shown that the first offer is often the best as it is based on the value that buyers attach to the property. Sellers tend to be sceptical at first, thinking that the buyer is trying to make a quick bargain buy. If it is a fair offer, you should always consider it.
11. Reducing the price may be a good thing
While no seller or agent would want to be in this position, there may come a time when it seems that the market is just not reacting to a particular asking price. In such instance, if you need to, or are motivated to sell, your agent may advise a price drop. Lowering the price could even result in a better offer.
* Compiled by Carin Smith