Homeowners who are looking to sell their property will be looking for ways to maximise the potential selling price that they are able to obtain in today’s property market. The first distinction that these sellers will need to make is the difference between the value of their property and the home’s current marketability. RE/MAX of Southern Africa, CEO, Adrian Goslett, says that there are several factors that determine a home’s value, much as there are distinguishing elements that influence a property’s marketability in the current market phase and economic environment.
Goslett explains that the value of a property is determined by taking into accounts aspects such as the home’s type, size and physical features such as the numbers of bedrooms or whether it has a garden, whereas marketability is more about the readiness of the property to be sold, which points to its aesthetic appeal and condition.
“To a large degree a property’s value is determined by supply and demand, as well as buyer’s personal preferences. During the boom period, for example, the perceived value of property was much higher because demand outstripped supply, a pattern which seems to be emerging again,” explains Goslett. “Property pricing is generally linked to demand and the value of a property is established by the prospective buyer. This means is that a home’s value is largely determined by what buyers are prepared to pay for it.”
He adds that although renovations or alterations to the home can change its price level to some degree, it does not always mean that the value of the property will increase. This is why homeowners who are undertaking renovation projects with the view of selling should take careful consideration of the current market and what buyers are willing to pay for homes with certain upgrades. “For instance, while a new kitchen is generally a good investment, it will typically not increase the value of the home to the equivalent cost of the renovation. Over-capitalising is also a concern, as improving the home beyond the value that the area dictates will negatively impact on the home’s saleability, with buyers reluctant to pay more for the property than other similar homes in the area,” advises Goslett.
According to Goslett, the marketability of the property is determined by how ready it is to sell. “Ensuring that the home is prepared for the market and ready to sell will increase the home’s marketability and attract more potential buyers to the property, which could in turn result in a slightly higher sales price,” says Goslett. “A property that is clean, neat and well-maintained will be far more appealing to prospective buyers. The marketability of the home will be increased by ensuring that it is in its best condition before being listed. While a landscaped garden or fresh coat of paint will not typically increase the home’s value, it will make the home more attractive to buyers and increase its marketability – even through the physical features have not been altered,” says Goslett.
He notes that marketability is often the reason why properties are listed in spring, as their gardens look more aesthetically pleasing when the flowers are in bloom. “Staging the property will also have an impact on its saleability. It is advisable to de-clutter the home, but keep it furnished. An empty home will make it look bare and it will be potentially difficult for buyers to see themselves living in the property. An experienced real estate agent will be able to provide valuable advice regarding staging the home and making it more appealing on show days,” advises Goslett.
He concludes by saying that while there is a distinction between value and marketability, both aspects should be considered by sellers to ensure that they maximise their potential selling price and make the most of the current favourable conditions sellers are experiencing.
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