You may know in your own mind when you decide to sell your home, but do you know your own market?

“One thing that is absolutely certain in real estate is that nothing stays the same,” says Tjaart van der Walt, CEO of the RealNet estate agency group.

“When one part of the country booms, another could quite well be losing population and real estate demand. And even very popular suburbs can suddenly be perceived as too pricey, causing buyers to focus their attention on more affordable areas that then become revitalised and rejuvenated in their turn.

“So what is up may go down and what is down may go up and no matter what the market conditions were when you bought your property, they are very unlikely to be the same when you sell.”

However, he says, even if your local market is currently depressed, there will be a buyer for your home – provided that it is presented and priced right. “Now everyone knows that your best move in any market is to keep your home in good condition, but getting the asking price just right for current conditions is much more difficult.

“You have to get comparative information that is specific to your area, as regards which homes have recently been sold, how much they sold for, how quickly they sold and most important, what the difference was between the original asking price and the eventual selling price.

“The chances are very good that the ones with the biggest price drops also took the longest to sell, and that you will be able to avoid such delays if you immediately pitch your asking price at the average selling price of the homes which sold fastest.”

The latest statistics from First National Bank, says Van der Walt, show that most sellers are still seriously out of touch with their local real estate markets, with 80% having to drop their asking price by an average of 12% in order to achieve a sale.

“It also takes much more time to negotiate back and forth and achieve sales in such circumstances, and sellers who want fast results are really well advised to study their own markets carefully and set asking prices at the outset that are in tune with current local conditions.”

Carol Reynolds, area principal for Pam Golding Properties (PGP) in the Durban North and La Lucia areas, says price is governed by market conditions and the lending climate, and in the current economy, affordability is keeping a lid on price inflation. “More specific factors for sellers to take into account are area/position, demand, security and whether a house appeals to a wide target market. The more specialised a property, the more difficult it can be to determine the correct price and to determine the duration of time it will take to sell.

“Unfortunately, buyers tend to focus on the negatives, and this means that a beautiful home with spectacular views might struggle to sell if it is situated on a steep property with lots of stairs.

She says there is still a lot of unrealistic pricing in the market. “This is the biggest single factor that is prohibiting the successful conclusion of sales at the moment. Up to 30% of transactions are not concluding because it is impossible to bridge the gap.

“On average the discrepancy between sellers' expectations and buyers’ offers is in the region of 15%. We have a number of sellers who regret not accepting their first offers, because the first offer is often the best offer and subsequent interest wanes as a property becomes 'stale'.

“It is always advisable to get an accurate marketing price from an experienced agent before going to market. It is our ethical responsibility to provide our sellers with accurate information and comparative market analyses to substantiate our valuations.

“As we say in the industry, there are always a number of ‘values’ that can be attached to a property: the seller’s price, the agent’s assessment, the buyer’s offer and the final settlement price. A realistic price initially generally results in a higher price at the end of the negotiation.”

The latest FNB Estate Agent Survey showed the estimated average time of a property on the market was a whopping 17 weeks and 1 day in the 2nd quarter (2Q) of 2010. “This points to a weak demand-supply balance situation,” says John Loos, property economist at FNB. – Eugene Brink

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