Swing a sale in a slow real estate market
To stimulate a sale, selling your property for a price lower than prevailing market rates can generate more interest
IIn a slow real estate market, selling a house can be a daunting task. Nevertheless, doing so is sometimes necessary or desirable despite market circumstances. A sale makes sense when the home’s mortgage value is higher than its market worth, when one has to purchase another house and pay two mortgages, if one wants to upgrade to a bigger and better house or if there is a need to downsize. Other circumstances such as job relocation and family issues can also necessitate the sale of one’s home - with an express need for a quick sale.
As a rule of thumb, it is never a good idea to sell anything when the market is bad and shows no signs of recovery. That said, if there is no alternative but to sell despite unfavourable market conditions, it is not enough to simply list the house and wait for an offer.
In such a situation, the seller should keep in mind that even though the market has decelerated, there are still plenty of homebuyers eager to find a house. There are some key tactics to help increase the possibility of a sale, and these pertain to preparing both the property and one’s mind to increase the probability of a sale:
Know your market
Before putting a house for sale on a depressed market you should understand what is really happening and why it is happening. Understanding gives objectivity, and an objective mind is more conducive towards a successful sale than a desperate one. Above all, it is important to know the true market value of one’s home, which is often very different from what one hopes or thinks it is. Most sellers operate in the dark and are simply offering their property for the price they want, regardless of what other homes in the same location are being sold for or are current- ly selling for. Undervaluing or overpricing your property while trying to sell it in a slow market is a serious mistake.
Be competitive in your pricing in a slow market. Property prices dip and the possibility of obtaining a really good price is remote at best. It is essential to price your home reasonably by looking at similar options available in the current market. If you take a look at the homes in your project or neighbourhood which are listed with brokers but are not selling, chances are that their owners’ expectations are just too high. To stimulate a sale, under-pricing your property when compared to prevailing market rates by just a little can generate more interest from buyers. For high- end properties – ie luxury units in metro cities valued at over R5 crore, one should consider using the closed bid process. Under this, property consultants invite bids from prospective buyers with the objective of achieving the best possible price. High-end and landmark properties are normally sold using this process, which invariably helps sellers to arrive at an optimal sale price.
A presentable home
Apart from right pricing, nothing will attract potential buyers more than a well-maintained house. This goes beyond just cleaning and sprucing it up. Retain only the things that actually add value to the flat. A small investment in making your property presentable is more cost-effective than a price reduction. Make the entrance presentable and address issues related to plumbing, water seepages, cracks in the masonry, loose railings and ill-fitting window frames. When there are many options available in the market, buyers will look for homes that are ready-to-move-in rather than units that require significant effort and expense on repairs and refurbishing.
Be flexible with showings
It is essential to keep your home available for inspection throughout the time it is listed on the market. Remember, it takes only one buyer to get your home sold. Keep your home available for viewing at moment’s notice, and do not restrict access solely to the times you are personally available. The more often your home is shown to potential buyers, the likelier is a quick sale.
Engage the right agent
In a slow market, using the services of a top- of- the- line real estate consultancy can be a faster route to a quick sale than roping in multiple small-time brokers. A first-class property consultancy employs more operatives and has a larger and more dynamic database of projects than smaller agents.