THE DIFFERENCE BETWEEN VALUE & MARKETABILITY
The most common mistake sellers make is failing to distinguish between the actual value of their home and its current marketability. While the value of a property is determined by things such as its size, features and the readiness of buyers to purchase homes of this kind, marketability is more about the readiness of the property to be sold and relates to aspects such as the home’s condition and aesthetic appeal.
How is the value of my home determined?
Value is largely determined by what buyers are prepared to pay for a property of that kind within the current market. This is closely linked to the supply and demand of similar homes on the market. When demand is greater than the supply of available properties on the market, the perceived value increases. Oppositely, home values can stagnate when there are a lot of homes for sale, but not many buyers. This is why you need to avoid over-capitalising on alterations that will price your property above the value that buyers are willing to pay for homes in your area.
Renovations do not always guarantee a return on investment. While a new kitchen or bathroom upgrade will certainly make the home more attractive to buyers and increase its marketability, these alterations do not necessarily mean that buyers will be willing to pay an increased amount equivalent to the cost of the renovation.
What does marketability mean?
A home’s marketability refers to how appealing the home is to potential buyers. Marketability increases by ensuring that the home is in its best condition before being 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 appealing to a larger number of potential buyers – even though the actual features of the home have not changed. Staging the property will also increase buyer appeal and help sellers fetch the full value for their home. An experienced real estate agent will be able to provide valuable advice regarding staging the home to increase its marketability.
How can I maximise my selling price?
Homes priced incorrectly within this highly competitive market will lose their ‘newly listed’ marketing advantage, which will severely hurt your chance of selling at full value. You should therefore work very closely with your real estate advisor to market your home at a price that accurately reflects both the home’s value and marketability. If you haven’t yet found a reliable real estate advisor, contact your nearest RE/MAX Office and arrange a meeting to discuss the sale of your home.