Determining your home’s resale value is the first step in the sales process, but it can be a complex task with so many contributing factors. However, in order to set the Property Price, the Market Value of the property will need to first be established.
The Market Value is the amount that the property is worth in relation to surrounding properties of similar specs, requisite to a fair sale. Essentially it is the price a property should sell for on the open market. Knowing and understanding the property’s Market Value will assist in setting a Property Price that is fair and competitive within its relative market. Several factors, namely location, age and condition of the property, play a key role and should be taken into consideration before setting a property price.
Sellers will always want to sell at the highest possible price, whilst Buyers will want to buy at the lowest price – determining Market Value will provide a platform for both parties to negotiate the transaction.
Factors affecting Property Value:
Location, location, location! Estate Agents maintain that one of the primary factors that influence a property’s value is the area the home is located in and its proximity and accessibility to amenities. Perspective Buyers place location above all other contributing factors, and as is often the case, will pick the area and then wait for a property to come available that meets their requirements. Certain areas are simply worth more than others.
Amenities in close proximity may either elevate the property’s value or take away from it. Easy access to reputable schools, shopping centers and entertainment facilities, public transport routes and parks will usually increase the value of an area – convenience is a sought-after commodity. However certain areas will be avoided due to traffic congestion or the condition of other homes in the neighborhood. For example, being situated too close to a power station or highway could have a negative impact on the market value.
The condition of the neighborhood, although largely out of the Seller’s control, is another contributing factor. First impressions count!
More and more, Buyers are looking to be situated within a well-maintained, community-centered neighborhood. General upkeep and safety are important aspects to consider in relation to property values within an area, and additional, beneficial services such trash collection, tactical response or security guards, booms and access-controlled gates, gardening services and ample parking also factor in.
2. Condition of the Property
As previously mentioned, first impressions are important. It’s advisable that when showing the home to potential Buyers, that it be clean and well-maintained. The general condition of the property is imperative. Unfinished projects and half-built upgrades will inevitably diminish the property’s value as Buyer’s automatically start mentally running costs before they have been won over by the home’s charm.
Renovations, repairs and improvements may add value to a home and facilitate a faster sale, but overspending and “over-improving” when compared with other homes in the area can lead to the Seller not being able to recoup the money spent and essentially losing money on transfer. Personal taste is often a factor that, if structural rather than aesthetic, can hurt the property’s value.
3. Age & Layout
Although older homes are generally more spacious, the perceived maintenance, repairs and upkeep associated with older homes has a negative impact on their demand – particularly those with outdated plumbing, roofing etc. Although not always the case, the older the home the less desirable and valuable it becomes.
There has been a shift among consumers to properties that are modern, simplistic and open-plan in layout. When the layout makes it difficult or expensive for a Buyer to customise it to suit their taste without extensive work, the property automatically devalues in their eyes.
Newer homes tend to be more sought-after, resulting in faster sales transactions due to high demand.
4. Market Trends
Be aware of market trends and how they affect market value. In a Seller’s Market, the supply of property is lower than the demand of Buyers, permitting Sellers to ask a higher price for their properties. Likewise, in a Buyer’s Market the supply of stock is greater than the demand of qualified Buyers, presenting Buyers with more choice and in effect forcing Sellers to lower their asking price in order to sell.
As the Sole & Exclusive agent, Etchells & Young offer to do a Comparative Market Analysis for their clients.
An evaluation on comparative pricing of similar properties in the area is a sure way to establish the Market Value, and then correctly and fairly set an asking price. The agent reviews current market trends and the demand in the area, as well as recently sold, expired and active listings nearby to give an accurate and realistic benchmark to facilitate a timely sales transaction between both parties.
Knowing and understanding the factors that influence a home’s resale value will aid both Sellers and Buyers in the sales process.