There can often be a big difference between the market price of a property and its selling price. Seeff takes a look at the meaning of both terms and how to set realistic expectations when putting your property on the market. For the benefit of those buying property, we also look at the various calculators on offer to help you find a property at an asking price that you can afford.
Market price explained
The market price of a property is the price that is arrived at by a real estate agent, taking into account factors such as other sales in the area and the specific details of your property and everything that it has to offer. When doing the valuation, the agent will take into consideration factors such as the size of the property as a whole and the size of your house. A more comprehensive list of the factors that go into determining the correct market price (asking price) for any property include the following:
- The current state of the property market
- The age of the property and the condition that it's in
- The price of similar-sized properties in the neighbourhood
- The state of the garden, if applicable
- The security features of the home
- Decorative elements such as flooring and the design of the kitchen
This market price that the agent arrives at will be the asking price that they will recommend you list and advertise your property for. The advice of a reputable estate agent is invaluable in determining an accurate market price. Thanks to their years of experience, your agent will know all there is to know about the market forces that come into play when determining the correct price tag for your property.
What is an example of a market price?
An example of a market price is a two-bedroom apartment in Century City, priced at R4 500 000. This particular property has a premium asking price due to its hotel-style living and sophisticated ambience. On the one hand, there is no guarantee that a buyer will put in an offer of R4 500 000. On the other hand, however, the property has been priced correctly for its location and offering.
Selling price defined
Is market price the same as selling price? In a nutshell, the answer is no. The selling price is the price for which someone actually buys your home. It's important to understand that if your market price is inaccurate, you're unlikely to sell your property quickly or easily. Setting your price expectation too high will deter potential buyers from coming to view your property. On the other hand, if you set your asking price at the right level, the property is likely to sell quickly. While your market price and your selling price may not be exactly the same, they are likely to be similar if your market price was accurate.
Calculating the costs
If you're thinking about selling one home and buying another, one of the important things to think about is how much your new home will cost you. Obtaining the asking price on your old property may be a big part of affording your new home, but that's not all there is to it. You also need to think about bond and transfer costs, bond affordability and bond repayments. This is where Seeff's assortment of free calculators offers you a lifeline, helping you to see exactly what the monthly costs associated with your new home will be.
The importance of putting your property on the market at the right price cannot be overstated - and neither can the need to have a qualified and experienced real estate agent helping you through every step of the process. Contact Seeff for more information.
Note: This post was originally published in August 2018. It has been completely revamped and updated for freshness, accuracy, and comprehensiveness in November 2021.