realADVICE: The market is always right
PUBLISHED 3 DEC 2018
When selling your home, it’s important to ask your estate agent for information about the current market conditions in your specific area or community, in addition to a comparative market analysis (CMA), before you set an asking price.
The reason is that a CMA, no matter how detailed, can only show you what buyers in the area have already done. It does not tell you what is happening right now, whether activity in the market is heating up or cooling down, how many competing listings there are and at what rate homes for sale are being absorbed.
This is vital information if you want to price your home not only to generate maximum initial interest but also to sell quickly for the most money possible. And it is information that you can only get from an experienced agent with a thorough knowledge of the day-to-day shifts in their local market.
It’s important to remember that local real estate markets can be very insular; although most will be similarly affected by macro-economic factors like interest rates, the rand exchange rate and consumer confidence, even adjacent suburbs can perform very differently to one another depending on the specifics of affordability, new development, new employment opportunities and the presence of certain security measures.
Broadly, a “sellers’ market” will be marked by confident buyers, short listing periods, a high absorption rate and only a few weeks’ worth of inventory on hand. Prices will generally rise more quickly in such conditions.
On the other hand, if your area is experiencing a “buyers’ market”, listings will generally take longer to sell, the absorption rate will be lower and inventory levels will be higher. Buyers will also be extremely value-conscious and you are going to have to price very carefully and possibly even offer some kind of incentive to attract their interest.
Indeed, whatever the conditions are in your area, you cannot afford to ignore them. The market is always right, and you will lose out if you try to fight it and set your asking price too high or refuse to negotiate with prospective buyers.