The first distinction to make when listing a property is the difference between the actual value of the home and its current marketability. There are numerous elements that determine a home’s value, just as there are aspects that impact a home’s marketability in the current economic environment and phase of the market.
While the value of a property is determined by looking at things such as its type, size, features and configuration, marketability is more about the readiness of the property to be sold. It relates to aspects such as the home’s condition and aesthetic appeal.
The value of a property is largely determined by the supply and demand in the market, along with buyer’s personal preferences. For example, when demand for housing is greater than the supply of properties currently listed on the market, the perceived value increases. The opposite is also true, in that when there are more homes for sale than buyers – home values can stagnate. There is a definite link between property prices and demand – the value of a property is not established by the homeowner, but rather the prospective buyer. Essentially what this means is that value is largely determined by what buyers are prepared to pay in the current market.
It is important to note that while renovations or alterations will affect the price of the property to some degree, it does not always mean that the value of the property will increase. Why is this? If the home is renovated with the view of selling, it is important to be aware of the current trends in the market and what buyers are willing to pay more for. A new kitchen or bathroom upgrade will make the home more attractive to buyers, but will they be willing to pay an increased amount which is equivalent to the cost of the renovation?
Another consideration is over-capitalising. If the improvements to the home are beyond what the value of the area dictates, it will negatively impact the property’s saleability. Why would a buyer want to pay more, when they can get a similar home in the same area for less?
Considering that the marketability of a home is largely determined by how ready it is to sell, preparing the home before it is listed will increase its marketability and ensure that it attracts a greater number of potential buyers. Essentially increased marketability can result in a higher price for the property. If a home is clean, neat and well-maintained, it will be far more appealing to prospective buyers. The marketability of the home increases by ensuring that it is in the best condition before it is placed on the market. Although adding a coat of paint and having the garden landscaped won’t necessarily increase the home’s value, it will increase its marketability and make it more appealing to a larger number of potential buyers – even though the actual features of the home have not changed.
Staging the property will also have an impact on its saleability. It is advisable to de-clutter and remove unnecessary items, but keep the home furnished. It can often be more difficult to sell an empty home because it can look bare and it will be potentially difficult for buyers to see themselves living there. An experienced estate agent will be able to provide valuable advice regarding staging the home and making it more appealing during viewings.
While there is a distinction between value and marketability, both aspects should be considered to ensure the maximise potential selling price is achieved.
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