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How to ‘take the pulse’ of your local property market when selling

31 Dec 2018

When selling your home, it’s critical to ask your estate agent for information about the current market conditions in your specific area or community before you set an asking price.

Even suburbs next door to one another can perform very differently, depending on the specifics of affordability, new development, new employment opportunities and the presence of certain security measures, says Kotzé.

“You need this in addition to a comparative market analysis (CMA), because no matter how detailed a CMA is, it 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,” says Gerhard Kotzé, MD of the RealNet estate agency group.

“And 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 knowledge that you can only get from an experienced agent who is hands-on and aware of the day-to-day shifts in their local market.”

Take a look at what homes in your area have sold for - click here.

It’s important to remember, he says, that local real estate markets can be very different from one another. “Although most areas will be similarly affected by macro-economic factors like interest rates, the rand exchange rate and consumer confidence, even suburbs next door to one another can perform very differently, 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 particular 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, Kotzé says. “In these circumstances, 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.”

“But whatever the conditions are in your area at this time, you cannot afford to ignore them. The market is always right, and you will lose out if you try to resist it and set your asking price too high or refuse to negotiate with prospective buyers,” says Kotzé.

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