How to know you're getting a reasonable price on your property
Category Money Matters
Homeowners may have different needs and requirements when it comes to finding the right property. But one thing they all have in common is finding the right home for the right price.
Regardless of whether it's a buyer's or seller's market, a fair price is paramount for a satisfied customer.
Understanding how to evaluate the price of a home you're looking to buy is important. So in order to make a sound investment, take a look at our following tips.
Consider comparable properties
In the real estate industry, this is called "doing your comparables." Essentially, comparables are similar-sized properties from more or less similar areas. You'll then look at features within the property and use these markers to decide which is best for you.
By doing this, you gain valuable insight into how the property you're interested in compares at price with different homes. However, if you're unsure of how to accurately make such distinctions then speaking to your Property Tree real estate agent is the best possible course of action. We are here to assist you in the selling and buying process.
Tip: Create a spreadsheet on your phone, maybe in Google Sheets. Here you can add the basic property features you'll be looking out for. You will need a template that covers the following points.
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Stand size
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House size
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Price
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Number of Bedrooms
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Number of Bathrooms
Give each room and section your own rating between 1 and 10 based on how it suits your particular needs.
Compare to unsold properties
Should a home that you're interested in have a similar price to properties that have either been taken off the market, then it's likely overpriced. Also, be sure to look out for similar properties on the market that remain vacant. These prices should definitely be lower.
Take a closer look at the property listings inventory index for information about the current demand for that particular property. The index is used to measure an average timescale for properties of that value, and how long they usually sit on the market.
Understand market conditions and appreciation
What are the general property trends of the area and the nation at large? Are prices going up or are they declining? If it's a seller's market then you will likely see a price increase. However, with the interest rates still being relatively low, South Africa's current property market is controlled squarely by the buyer. Take advantage of it now.
However, even if the tides are turned towards the seller, the property share can still be overpriced. Especially if the market is on an upwards incline. It can be difficult to know where the increases lie so also consider factoring in the mortgage interest rate and the current state of the job market and its effects on the economy.
Be aware of "For-Sale-By-Owner" property
Also referred to as FSBO, be careful with the pricing set by property owners who sell without an agent as the usual 2.5 to 3% standard commission rate does not apply. Many private sellers forget these commission rates and may unwittingly overprice their homes.
Beyond that, private sellers simply do not have the same guidance or knowledge required that an experienced agent does in guiding you through the selling and buying process. It may also be the case that the private seller did not follow an agent's price suggestion, and opted to try to sell it for more.
Consider your first impressions
If your overall impression of a property is lacklustre then it's fair to conclude that the price will never feel right. Even if the presented value may be a bargain to most, an individual's perspective of value, and where they place it is always going to be suggestive. Sometimes, you might even be happy to pay slightly over the market value if you really love the home. Sometimes, it's about the feeling you get. Don't be afraid to follow your intuition here.
Speak to your Property Tree agent
Regardless of how knowledgeable you might be, it is always advised to sell and buy a property with an experienced real estate agent by your side. At Property Tree, we understand the market all too well and keep a finger on the pulse of the latest property trends.
The fact of the matter is, without even needing to read the data, a real estate agent is always likely to have a good sense of whether a property is priced fairly and appropriately.
Whether you're looking for your dream home or a home with solar energy in Hartbeespoort, contact us at Property Tree and let our professional group of real estate agents find the right home for you!
https://www.property-tree.co.za/ or contact us: https://www.property-tree.co.za/contact/
Property Tree holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority.
Author: Bryce Anderson