Comparative Marketing Analysis
With homes making up a large part of many South Africans investment worth - many ask themselves "What is my property worth?"
Regardless of whether you are selling property now or are simply trying to get an idea of your property value and you are considering enlisting the assistance of an estate agent, you need to ensure you understand the methods employed to ascertain accurate property values and avoid mistakes Sellers make.
Wise South African property sellers should ask for a proper Comparative Marketing Analysis from their estate agent before putting their property onto the market or even listing their property with an estate agent.
A professionally completed Comparative Marketing Analysis involves some hard work, research and a strong knowledge base on prevailing local real estate market conditions, what properties are currently for sale and what recent housing sales have been.
When you are preparing to sell your property, a property CMA is an invaluable tool in arriving at an accurate property value in today's competitive market.
The CMA report itself should consist of a number of components, including:
Current or Active Property Listings
These are properties that are currently on the market - comparable properties for sale - and at what price. Whilst these are important because they are in effect your ‘competition', they are not truly indicative of true market value, as we all know that most properties sell for less than their advertised or listed price.
A professional Comparative Marketing Analysis should also provide detailed information on the Active Listing in terms of accommodation offered and features.
You need to remember that whilst a competing house is currently on the market for "R XXXX" - this doesn't mean it's actually going to sell for that price!
Prospective house and property purchasers almost always come in with an offer lower than asking price - so what you see in the newspapers and on the internet listing price tag - is not necessarily what the seller gets!
Recent Property Sales in the Area
This section of your property CMA will provide detailed information on houses or local properties that have sold recently.
These are important from a property value comparison as they are indicative of what property buyers in the area are actually paying for the properties that they purchase (as opposed to "active properties" which have yet to sell so their sales price is as yet undetermined) You need to take a good hard look at these "comparable properties" as they are in most cases the dictators of current market value.
Market competition, when there are numerous properties for sale that are similar can be an issue for sellers to look out for as pricing in this situation may need to be very keen. In these circumstances property sellers need to understand that most buyers buy by comparison - and elimination!
Bear in mind when you are working through this section of your Comparative Marketing Analysis, "comparable" sales are those which resemble your property or house the most closely.
It is really difficult to draw comparisons on certain properties when all they share is a common area, and a professional agent will select these carefully to make it an "apples for apples" comparison.
Chas Everitt's bespoke property CMA system also has the ability to weigh different property types up using a unique square metre comparison and adjustment system which improves evaluation accuracy.
Common comparison areas on properties, outside of the traditional number of bedrooms and bathrooms would include similar size homes or square metres, homes of a similar age, design or style, houses or properties in the same location within the area (if both afford great sea views for example or are near schools), what modernizations, extensions, upgrades or amenities the property affords.
Expired Property Listings and Properties that failed to sell
This section of your CMA will in most cases show the highest median property sales price due to the fact that they did not sell and in all likelihood were probably priced too high for the market conditions.
These type of properties in South Africa also "expire" because of other issues including cases where they were not correctly exposed or marketed, where the condition was poor or major repair work was needed, or where the terms around the sale (occupation dates for example) were difficult.
Properties that are withdrawn from the market
These are homes that have been taken out of the market - this may happen for a number of reasons.
The most common reason, as mentioned, on expired properties in South Africa is because the pricing of the subject property was just too high for market condition.
Properties however are also withdrawn for a host of other reasons including what is referred to as "seller remorse" - where a homeowner has decided they no longer want to sell, the offers received whilst the house was on the market were below the level the seller would accept or on occasion where sellers were dissatisfied or unhappy with the service from their estate agent.
Employ the services of a professional estate agent - and take their advice - particularly when it's backed up with the facts, figures and information a professional and well prepared CMA prepared specifically for your property. Many sellers who ignore the advice and pricing recommendations given to them and market their homes at unrealistic prices may the price themselves - which is that their property joins the others in the CMA on the "failed to sell" list.
Selling your Property in South Africa?
Selecting an estate agent who can draft an accurate CMA is critical to your selling success.
Contact one of our national real estate agencies and ask them for their assistance in preparing a for you on your own property.
Alternatively call the Chas Everitt National Number on +27 11 801 2500 or After-Hours +27 860 104 355 and we will get one of our local estate agents to arrange a viewing appointment at your convenience.
Author: Chas Everitt