How to price your property to sell

Sales are facts, asking prices are hopes

The most useful number for pricing your home is what similar homes near you actually sold for recently. Asking prices on listing sites only tell you what other sellers hope to get, and homes that are priced too high are exactly the ones that stay on the market.

Sale prices are registered at the Deeds Office. An estate agent can pull recent sales for your street and suburb from property data services and prepare a comparative market analysis (CMA): similar homes, their size, condition and sale price. Ask for the sales list itself, not only the agent’s conclusion.

The municipal valuation is not the market value

Your municipal valuation is done for rates purposes, on a general valuation date that may be years old, and with a mass appraisal method. It can be well above or below what a buyer will pay today. Use it as one data point at most.

Think like a buyer searching

Buyers search in price bands: up to R1.5 million, up to R2 million, and so on. A house listed at R2 050 000 is invisible to everyone whose search stops at R2 million, and those are often the buyers who would have paid R2 million for it. Pricing just under a round number puts your home in front of more people.

Buyers also think in monthly repayments, not in prices. A difference of R100 000 in price is a few hundred rand a month on a bond, which you can check with the bond calculator. That is the number a buyer weighs against other homes.

The first weeks matter most

Interest in a listing is usually highest in its first weeks, when it is new to every buyer who has been searching. If it is overpriced then, those buyers move on. Weeks later, after a price drop, the listing looks stale and buyers start asking what is wrong with it. Many sellers who start high end up selling for less than they would have if they had priced realistically from the start.

If you get no offers and few viewings in the first month, the market is telling you something about the price.

Prepare before you list

• Fix small things: dripping taps, broken handles, cracked tiles, peeling paint. Buyers mentally overestimate what repairs will cost.
• Arrange the compliance certificates early. You will need an electrical certificate of compliance, and depending on your home and area also gas, electric fence, plumbing or beetle certificates. Finding a problem late can delay transfer.
• Gather the paperwork: title deed details, approved building plans (unapproved additions can cause trouble at transfer), rates accounts and, for sectional title, levy statements.
• Complete the property condition disclosure form honestly. Under the Property Practitioners Act an agent must have it signed by the seller. Hiding a known defect can come back to haunt you even with a voetstoots clause.

Choosing an agent

Interview more than one agent. The one who quotes the highest price is not necessarily the best; ask each to show the recent sales behind their figure. Check that the agent and the agency are registered with the Property Practitioners Regulatory Authority and hold a valid Fidelity Fund Certificate; you can verify this at theppra.org.za.

Understand the mandate before you sign: a sole mandate gives one agency the right to sell for a fixed period, an open mandate lets several try. Commission is negotiable and is normally paid from the proceeds on transfer.

This is general information, not a valuation or financial advice. For a figure on your home, ask a local agent for a free valuation backed by recent sales.