Get a good CMA and speed up your home sale
Category RealADVICE
There is a growing belief among home buyers that they should never offer the full asking price on a property - because the sellers are bound to have set it well above market value anyway.
And while this is not necessarily true, says Gerhard Kotzé, MD of the RealNet estate agency group, that suspicion among buyers, and the need to be able to substantiate asking prices, is certainly something for sellers and their agents to focus on.
"Sellers need to know, firstly, that the market value of their property has nothing to do with the municipal value, the insured value or how much money they need to make from the sale in order to buy their next home.
"Secondly, while the current market value is quite simply what a willing and able buyer will pay for the property at any given time, it does depend on several interactive factors that are continually in flux, such as home loan interest rates, general economic conditions, the condition of the property, the housing supply situation and the buyer's financial situation."
Third, he says, the closer the original asking price is to the current market value, the more likely it is that the home will attract many prospective buyers keen to make an offer to purchase and able to secure a home loan to finance their purchase.
"However, since the market value can change literally from week-to-week and even from day-to-day, home sellers really do need access to professional help and up to date market intelligence in order to determine an asking price that will have this kind of effect."
The best tool at their disposal, says Kotzé, is the Comparative Market Analysis (CMA) - "and it should be available from any reputable and knowledgeable agent who wants a mandate to market the property".
Compiling a CMA involves comparing the sellers' property with similar properties in the same area that have been recently sold, and the most reliable CMAs are those which use the actual selling prices recorded in the Deeds Office when properties are transferred. "This gives sellers insight as to what buyers in their area are actually prepared to pay, or the final negotiated prices as opposed to the originally advertised prices they may have seen for homes similar to their own."
"To be really effective, the CMA should also contain information about the length of time that each of the sold properties was on the market. Sellers can then see the price level at which there is a significant market resistance, which is represented by a long interval between a property first being listed for sale and actually being sold - or being taken off the market unsold."
On the other hand, he notes, by scanning the CMA for the sold homes that had the shortest listing times and using their actual selling prices as a guide, sellers should quickly be able to determine a "winning" asking price for their properties.
"And with the help of a professional estate agent who is able to pre-qualify prospective buyers, they should then be able to look forward to a successful sale within just a few weeks - and possibly even days in areas where well-priced homes are in short supply."
Author: RealNet
