If you own a two bedroom flat in Green Point and you offered the property
for sale at R20,000,000 it would never sell (or it would remain on the
market until inflation caught up with your price). If you asked R100,000
for it, you'd have a sale before your advertisement even hit the papers.
So you need only search for the figure, somewhere between R100,000 and
R20,000,000, that will attract buyers and at the same time bring you the
most money. One point is clear: If you can sell for R100,000 in five minutes,
and for R20,000,000 in 20 years, obviously time and money are related
in real estate sales.
If you are under no pressure to sell, you have the luxury of exploring
the market, experimenting with price, and accepting an offer without pressure
however offering your property to the market at an unrealistic level could
result in your property going stale. So as a seller you should focus on
determining market value and base your price on that alone.
If, on the other hand, you are working under a deadline, a no-nonsense
price, slightly under true market value, will bring immediate action.
When such a listing comes through to an agent, a sense of panic is instilled
in the agent and a desperate attempt to sell the property is made in order
to ensure that the opportunity to make the sale is not missed.
A one-day sale, though, does not meet the standards set for fair market
value of property. The concept of fair market value comes from the field
of valuation.
Fair market value has been defined as the most probable price a property
will bring if it has been widely exposed on the market, if sufficient
time is allowed to find an informed buyer, and if neither party is under
undue duress.
Pricing your property involves an attempt to estimate fair market value,
depending on circumstance.
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