Step 1 :
Price

Show me the Money!

The first question that sellers always ask, is:
HOW MUCH!
Or in other terms:
What is my home worth?
What will I get If I want to sell my home?

I think this is the best question to ask as it goes hand in hand with “why would you want to sell?”

A competitive price is not based on what sellers hope for:

  • Price is not what sellers need or want from the sale
  • Price is not what sellers paid originally or what the house down the street sold for
  • Price is not what a website or another agent suggests

Selling Price is determined by the market

“The price is what willing and informed buyers will actually offer and competing sellers are accepting, and it’s based on the current market; those properties that have recently sold.

This locally-set market price will influence whether buyers even see your home in their online search, whether they schedule an in-person showing, and what price they will ultimately offer.”

Riekert:

My job is to work through all the DATA points and reports below and advise a Listing price.
In the End it is the Seller's decision of what the final listing price will be.

1. Understanding Market Conditions

The first thing we need to look at when starting the process is to have a look at the current market. This will have an impact on pricing as well as speed of sale.

We call this a total market overview. It is a snapshot of our residential real estate market.

Part of my job is to look at four market data sets.

a) RSA vS International

  • Global Economy
  • RSA Economy
  • Political sentiment
  • Tax Policy
  • Emigration

B) Western Cape

  • CT vs rest of South Africa
  • Migration to CT
  • Pre-designed layout options
  • Cape Town 6% Growth P.A.
  • 4 months, 1 day on the market (3M+)
  • Water restrictions

C) Suburb or Estate

  • History of the suburb past year
  • Number of properties sold
  • Average price
  • Time spent on the market?
  • Expired listings?

D) Price bracket

  • Filter per bracket
  • Eg. 2.5M - 2.9M
  • Same data as nr 3
  • Average Listing price?
  • Average Selling price?
  • % between List price and Sell price (Eg. 4%)
  • Currently on the market (Listing price)

What is the difference

2. Getting Specific about your home

So now that we know what the condition of the markets are we have to find out exactly where your house will be in relation to other properties in your area.

I won’t find the exact home but I look at things like:

- Number of bedrooms
- Number of bathrooms
- Number of garages
- Erf size
- Building size
- Extras (flatlet, pool, solar panels, etc)

- Location
- Age of home
- Style
- How long on the market?
- Average selling price
- % between List price and Sell price (e.g.: 4%)

 

Using various platforms like the deeds office, CMA, Lightstone, Property24, PrivateProperty and local agent knowledge we should be able to provide a range of values in line with your time-frame.

3. Setting the Listing Price

Now that we have done the comparative market analysis (CMA), you have to decide on a listing price.
You will have your motivation for selling your home.
It could be that you are upgrading, downsizing, emigrating .
You will have an idea of what time-frame you are looking at.
That will directly influence the list price.

As mentioned earlier we know that currently properties in Cape Town sits 4 months and 1 day on the market (that is even higher for 3M properties).

What's your time-frame? (2 months, 6 months, 1 year, unsure?)
Once we know your time-frame we can set the listing price accordingly.

What Is The Biggest Mistake That Property Owners Make?

They go for the “list high and negotiate” strategy. We all know everybody wants a special deal and no one wants to pay full price. So pricing high and then accepting lower offers in theory makes a lot of sense. That is a route we can go.

What They hope will happen

We might get lucky with "that" buyer (the one that does not know the market) being in the market now.

What happens?

An overpriced home will be evident by a lack of interest, fewer showings, no offers, a longer time on the market.
This property ends up being "stale" so buyers ends putting in unrealistic low offers which the seller then has to take because he ran out of time.

The Reality

If you want to sell you need to be within 2%-4% of the market value (depending on price bracket). That is where the offers are occurring. The further you are from the price, the less activity you will get.

My recommendation

Price it at the market value and don’t negotiate too much. I will rather bring you 10 offers of which you reject 9 than not bringing you any offers at all.

4. Costs to you

It is important to be aware of the costs that will be deducted from your final selling price. Below is a list of costs and who are responsible for what.

Seller

  • Agent's commission
  • Cancellation of bond
  • Bond cancellation fee
  • Rates and taxes
  • Levies and special levies
  • Compliance certificates
  • Other

Buyer

  • Transfer costs
  • Transfer duty
  • Bond costs
  • Occupational rental
  • Levies
  • Other

ESI attorneys has been so kind to create a detailed explanation of all the costs involved. Click on the image to download.

Now that we are priced right let's look at Condition (Staging)

Step 2: Condition
Price
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Condition
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Marketing
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