What is my home worth? What every property owner should know
Every homeowner wonders what their property is worth. During the housing bubble leading up to 2007 one could experience the pleasant thrill of imagining money piling up in the bank. After the crash, remembering the looming mortgage debt could give one a sense of dread. These days, who knows? Elaine Chetty, Licensee of Seeff Richards Bay, provides some tips on how to obtain a valid current valuation of your property. Coming up with a real answer to this question is important if you want to sell your home, and pinpoint the right asking price. It is also kind of fascinating to see how much your investment may have appreciated over the years. Here are some ways to figure out the magic number. Tap a real estate agent’s expertise Real estate agents specialize in answering the question “How much is my home worth?” for their clients, which they do by running a comparative market analysis. This process involves finding similar properties that sold within the past 90 days or the past year. The most accurate comparison is a home that’s nearby, similar to yours in square metres, has the same number of bedrooms and bathrooms, and ideally a similar lot size. Once your agent finds a few recently sold properties for comparison, they will average the purchase prices and uses that figure as a baseline for how much your home is worth. Size up the competition From there, your agent will size up the current competition. You should always look at what other properties are listed for in your community. For instance, if your neighbour’s home is listed for R1.4m and you want to list yours at R2m, you had better be able to explain the price difference to prospective buyers, or else adjust your price accordingly. Try to remain objective Sellers always think that their home is worth more than it is, because of their personal attachment. Indeed, it’s hard to boil down years or decades of memories in a home to a number. It’s also hard to accept that your home is worth less than what you paid for it, or that you can’t just add on the price of the renovations you’ve made. Why it’s important to price your home right Price your home too high, and it could wind up sitting on the market. That’s a big problem, because a property that goes unsold for an extended period of time (e.g. more than 45 days) often becomes ‘stale’. Buyers get suspicious when they see a house that’s been on the market for a while, and think that something is wrong with it. If that happens the seller may end up having to make a significant price reduction – sometimes dropping the price below market value in order to attract a buyer. On the other side of the coin, pricing your home below market value in an attempt to stir up interest and generate multiple bids can also backfire. Underpricing your home frequently leads buyers to assume that your home is worth only its listed price. Your best bet Your best bet is to list your home close to what it’s really worth – in other words, its market value. When in doubt, turn to your real estate agent to help you cut through the haze and help you to pinpoint the right price. Contact Elaine Chetty of Seeff Richards Bay on 083 513 5559; (O) 035 789 0490/1, email elainec@seeff.com
