Tips to find­ing the best home

Lesotho Times - - Property -

FOR a buyer to un­der­stand whether or not they are get­ting the best home for their money, they need to un­der­stand the fac­tors that con­trib­ute to a prop­erty’s worth, bear­ing in mind that there is more to the value of prop­erty than the price be­ing paid for it.

This is ac­cord­ing to Adrian Goslett, re­gional di­rec­tor and CEO of RE/MAX of South­ern Africa, who says there are sev­eral other fac­tors that con­trib­ute to a home’s value that a buyer should con­sider be­fore they make the pur­chase.

Th­ese in­clude aspects such as the prop­erty’s lo­ca­tion, as well as the mi­cro mar­ket sur­round­ing the par­tic­u­lar sale trans­ac­tion. He says care­fully re­search­ing th­ese el­e­ments will help the home buyer in se­lect­ing the right prop­erty and achiev­ing good re­turns on their in­vest­ment over the long term.

“If a po­ten­tial buyer has done their re­search and has a fairly good un­der­stand­ing of the nu­mer­ous de­tails that are in­volved in a prop­erty sale, as well as know­ing their own fi­nan­cial and per­sonal re­quire­ments, they will have a much bet­ter chance of find­ing a prop­erty that of­fers good value for money,” says Goslett.

He says de­ter­min­ing the price bracket, the type of prop­erty and cri­te­ria that the prop­erty must have be­fore start­ing the search will make the process of find­ing the right home far eas­ier.

“Once the buyer has an idea of what they are look­ing for, a real es­tate pro­fes­sional will be able to as­sist them in fine-tun­ing their search and nar­row­ing down po­ten­tial op­tions,” says Goslett.

“A real es­tate agent who spe­cialises in the area in which the buyer wishes to pur­chase will be able to pro­vide valu­able in­for­ma­tion about that par­tic­u­lar area. Of­ten agents will have ac­cess to past sales fig­ures and data that will help the buyer make an in­formed choice.”

He says they will also be able to guide the buyer with re­gards to the cur­rent con­di­tions that sur­round the mar­ket in that area and whether or not the home is a worth­while pur­chase based on its ask­ing price, per­ceived mar­ket value and the cost.

Goslett pro­vides po­ten­tial buy­ers with three con­sid­er­a­tions when look­ing for a good value-for-money prop­erty:

1. The price is right The ask­ing price of a home is re­garded as the prop­erty’s worth in the cur­rent mar­ket. Goslett says all too of­ten sellers in­flate their ask­ing price due to their emo­tional at­tach­ment to the home. As a re­sult, the price that the home is on the mar­ket for is not al­ways the true mar­ket value of the prop­erty.

He says it is for this rea­son that buy­ers should have a broader un­der­stand­ing of the mar­ket in the area and com­pare sell­ing prices of other prop­er­ties which of­fer sim­i­lar fea­tures. This will help the buy­ers to as­sess whether or not the ask­ing price is within a fair range of mar­ket value for the area.

2. Eval­u­at­ing true value The cur­rent mar­ket con­di­tions are one of the ma­jor in­flu­ences when look­ing at the value of a prop­erty. In a boom phase of the mar­ket, prop­erty val­ues are per­ceived to be far greater.

Con­versely, dur­ing a slump in the mar­ket, homes gen­er­ally sell for less. In the years that have fol­lowed the in­ter­na­tional down­turn, prop­erty val­ues have in­creased.

“In fact, there are ar­eas where prop­erty prices are higher than what they were dur­ing the height of the boom in 2007. This re­it­er­ates the fact that prop­erty is best viewed as a long-term in­vest­ment,” says Goslett.

“De­mand also has a huge im­pact on the per­ceived value of prop­erty and pric­ing. With the cur­rent mar­ket ex­pe­ri­enc­ing in­ven­tory short­ages, de­mand has strength­ened as fewer prop­er­ties mean more com­pe­ti­tion among buy­ers.”

Es­sen­tially, he says a prop­erty’s value is largely de­ter­mined by the buyer in the mar­ket, not the seller. The more buy­ers are will­ing to pay for a prop­erty, the higher the prop­erty’s value will be.

Fac­tors that in­flu­ence how much buy­ers are will­ing to pay for a prop­erty vary due to per­sonal choice and life­style. Cer­tain buy­ers might pay more for a prop­erty if it fits into their life­style needs, such as prox­im­ity to a par­tic­u­lar school, their work­place or pub­lic trans­port. What de­ter­mines value for one buyer may not be the same for an­other.

3. Don’t for­get costs Goslett says home­own­ers of­ten think that they will be able to make back a large por­tion of the costs spent on ren­o­vat­ing and im­prov­ing the prop­erty, and there­fore price it ac­cord­ingly when they put it on the mar­ket. But, while there is a cer­tain el­e­ment of truth to that, it de­pends heav­ily on the ren­o­va­tion or upgrade.

“How the ren­o­va­tion im­pacts the value of the prop­erty is also largely based on how they are per­ceived by po­ten­tial buy­ers. Of­ten ren­o­va­tion projects are based on the cur­rent home­owner’s per­sonal pref­er­ence or cri­te­ria. If the buyer has dif­fer­ent needs or pref­er­ences, the ren­o­va­tion will have far less value to them,” says Goslett.

He says al­though hav­ing a real es­tate agent to pro­vide a com­par­a­tive mar­ket anal­y­sis is an ex­cel­lent start­ing point in de­ter­min­ing whether a prop­erty is a worth­while pur­chase, a prop­erty’s true value will largely be sub­jec­tive.

“The buyer is the only one who will know what a home is worth to them. At the end of the day, a home is more than an in­vest­ment - it’s a place to live.”

— Prop­erty24

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