Every seller wants and is entitled to sell for maximum market value. Your property is one of your most significant assets and you deserve to maximize its’ value. In the process of trying to sell for the most money, there is a dangerous pitfall that could cost a seller a great deal of money, should they fall into it.
The challenge is always knowing what price to list your property at. Most sellers will call in a few estate agents to give them an indication of the current market value. Sadly, not all agents will give the seller an accurate appraisal. Why? Because, for some agents, the only way to get you to list with them is to overprice your property – thus tricking you into listing with them.
It’s dishonest business practice, and it’s condemned in the Estate Agents Code of Conduct – but we see it happen all the time. We call it “buying your listing”. Why is it such a dangerous pitfall?
When a property is overpriced it sits on the market for an extended period of time. It attracts the wrong buyers – buyers who are looking for a property that is worth more. Sellers often ask why buyers don’t just make an offer. But if they’re the wrong buyers, not even looking for this kind of property – why would they make an offer.
We’ve all seen properties that have sat on the market for months, even years. They eventually sell for much less than the market value.
So how do sellers avoid this trap and still sell for maximum market value? The first step is to get the agents who appraise your property to show their comparative market analysis. It has to be backed up by facts. The facts will be other comparative homes that have recently sold, as well as other comparable properties that are currently for sale.
Try to see your property through the eyes of the buyer. This means taking your emotional “wish-price” off the table. Once you have determined a realistic market value then list it within 5% of this price. Why? Because buyers respond to market value. They will shop in a price band 5% above what they can afford. This way you attract the correct buyers.
Ensure that your listing agent gives you feedback from every buyer that views your property. The comments from the buyers on the value of your home are the key to you ensuring you are listed at the correct price. Buyers know within 5 minutes of walking through your property what it’s worth – just the same as you did when you bought it.
If the feedback is that your price is too high then adjust it as quickly as you can to the indicated market value. When you do this you appeal to more buyers. The stronger your buyer enquiry the greater the buyer competition is. And that’s when they offer you their maximum.
Director Harcourts South Africa