When it comes to selling a home there is no shortage of advice from a number of sources, such as family and friends, however being given a lot of information doesn’t necessarily mean that it is the right information.
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, receiving advice and information from so many different sources can lead to uncertainty about certain key aspects of the property sales transaction.
He notes that in today’s age of technology there is a vast amount of information at consumer’s fingertips, but having access to information and determining what can be trusted are two very different things entirely.
"It is not always easy to determine what information and advice should be held onto and what to ignore. As a result there are several misconceptions that have made their way into the marketplace," says Goslett.
He provides a few truths and facts to debunk the misconceptions and steer sellers in the right direction:
Misconception – Sellers determine the home’s selling price
While sellers will have a say in setting the home’s asking price, the selling price of the property is largely based on the market and what buyers are prepared to pay. It is important that the asking price of the home is what is considered to be a fair market value based on key elements such as the home’s size, condition, location, the current property market conditions and the selling prices of comparable homes in the area.
"It is ultimately the seller who will have the final say as to what the home is listed for, however it is important to note that the initial asking price and the actual selling price of the property could be vastly different," says Goslett.
Misconception – Pricing the home above market value will leave negotiation room
Overpricing a home does two things - it chases potential buyers away and makes other homes in the area look like a bargain. A seller may feel that they are giving themselves some cushioning during the negotiating process, but in actual fact overpricing has the opposite effect because it turns buyers away and the deal never gets to the negotiation stage. If buyers have done their homework and researched home prices in the area, they will recognise an overinflated asking price and will likely by-pass taking a second look at the property.
According to Goslett there might be buyers who can afford to purchase the property for its fair market value, but overlook the property if it is listed for too much. There is also the matter of buyers who can afford the inflated price, but soon realise that home may not compare to others in a similar price bracket. Overpricing will lead to the alienation of buyer pools, which can result in the property sitting on the market for longer than it should and ultimately selling for less than it should.
Misconception – There is no need to spend money on the property before selling
There is a market for buyers who are looking for a home they can fix up or renovate themselves, however most buyers want a home that they can simply just move into.
"There is no need to completely update the home, but it will be easier to sell a property that is aesthetically pleasing and well-maintained. This could be merely a matter of a coat of paint and a few minor repairs. It would be ideal to have any major repairs done before the home is placed on the market, but the extent of what is done to the home will depend on the buyer’s financial position and time frame. If any defaults are found during an inspection, the seller can then discuss options with the buyer regarding additional repairs or dropping their asking price," says Goslett.
Misconception – Renovations and home improvements pay for themselves when you sell
Although certain renovations and home improvements will add value to the property, very few renovation projects will provide a complete payback on the money invested. Goslett says that before embarking on any project it is important to get expert opinions on what should be fixed or changed and what kind of return can be expected as a result.
"Debunking misconceptions and knowing the truth about selling will help homeowners to get the most out of their property transaction. It is always best to take advice from a trusted source that can provide accurate and helpful information. If ever in doubt, sellers should seek out the counsel of a reputable real estate professional who will be able to guide them in the right direction," Goslett concludes.