There is a lot of advice out there on how best to sell a property. Most of it starts with the importance of getting an accurate property valuation. While it’s relatively common knowledge that your listing price plays a critical role in your property’s performance on the market, there’s a lot less information on how to tell whether the price your agent recommends is the right one.
“Property valuations have actually come a long way in recent years,” says Craig Mott, National Sales Manager of the Rawson Property Group. “Not so long ago, so-called desktop valuations were the norm. These days, any price recommendation based solely on a desktop valuation should be taken with a very large pinch of salt.”
Mott explains that desktop valuations essentially look at recent sales prices for homes with similar core features (bedrooms, bathrooms, garages, erf size, etc.) to yours. A listing price is then recommended based on these statistical figures, with minor adjustments for things like prime locations and views.
“The trouble is, because of the length of the sales and registration process in South Africa, the figures used in desktop valuations are often several months out of date, if not more,” says Mott. “In a market like property, where conditions can shift quickly, that’s never going to give you the accuracy you need.”
Desktop valuations still form part of most modern property valuations, but Mott says far more goes into a good real estate agent’s process than that.
“Data-wise, we look at a combination of accepted capital growth formulae, the replacement value of the property, recently achieved sales of similar homes in the area, and current asking prices of
similar properties, too,” he says. “More importantly, however, we also include subjective criteria like a property’s ambiance, flow, and alignment with current buyer preferences. These are usually explored and explained as part of a comparative market analysis showing current properties on the market in your area.”
According to Mott, these more subjective areas are where an agent’s hands-on expertise really comes into play.
“There is huge value in the insights you gain when you’re walking buyers through properties, day after day,” he says. “Good agents develop strong instincts for how a property will be received on the market, who its primary target audience will be, and how that might influence its price point.”
But how can you tell if your valuation includes this kind of perspective, and whether or not your agent’s instincts are on point?
“Firstly, make sure any data-driven analyses you get are supported by detailed comparative market analyses of current listings,” Mott says. “Secondly, make sure those comparative market analyses include real-world advice and observations, and aren’t just a collection of listings pulled straight from a property portal. This is something we really emphasise in our Rawson Property Group valuations – providing unique and invaluable context to prospective sellers.”
Last of all, Mott urges sellers to ask their agent to personally walk them through the valuation and explain the thought process that went into it.
“Ideally, you should leave that discussion understanding exactly how the agent arrived at their recommendation, and feeling confident that it’s based on solid, substantiated evidence,” he says. “You should also have a better idea of the agent’s experience in your neighbourhood and their previous successes, and feel comfortable that they have what it takes to handle your sale.”
But what happens if you go with your agent’s recommended price point, and your property still doesn’t sell?
“This can happen on occasion – property valuations are as much an art as they are a science,” says Mott. “The important thing is to respond quickly if your property isn’t performing as expected.”
A strong sign that you’ve missed the mark on pricing is overshooting the average time on market. If this happens – and you’re confident the fault is not with marketing reach or quality – Mott says a price adjustment might be necessary.
“At the end of the day, as long as you’re working with an experienced agent, backed by a strong brand presence, you should be able to bounce back from almost any pricing error when you catch it quickly,” he says. “That said, it’s always better to get it right the first time, so don’t feel pressured into making hasty decisions or afraid to ask as many questions as necessary to feel confident that you’re making a fully informed choice.”
