Our current lock down situation is nothing if not challenging, but some of the measures in place also afford us opportunities to do things a little differently, including the selection of real estate agents which is far too often based solely on the property valuations presented.
“In real estate, the practice of offering extremely optimistic appraisals in order to obtain sole mandates does unfortunately happen,” says Chris Cilliers, CEO and CO-Principal of Lew Geffen Sotheby’s International Realty in the Winelands.
“Especially during tough economic times or challenging periods like the current situation where COVID 19 and lock down have exponentially increased the pressure in what was already a very bearish buyer’s market“.
“However, it’s chiefly during these times that the highest evaluation is seldom the best evaluation for numerous reasons – and should at least be tempered with a best case and a worst-case scenario, or the property will end up staying on the market for an extended time.”
She reminds us that unlike other industries, such as insurance, this is not a ‘bricks and mortar’ valuation which is easier to pinpoint, but rather a market valuation which also takes other factors into consideration.
“Our valuations must make provision for the prevailing market conditions and a measure of uniqueness in every property as well as current trends which all influence on the final value that a particular purchaser may perceive“.
“In my opinion, a market valuation should always be expressed as a range between two values to allow the market to determine the ultimate price.”
“It’s understandably easy to be won over by the highest valuation received, especially when it’s presented by an enthusiastic agent seated across from you,” says Cilliers, “but with virtual valuations set to be the temporary norm at many agencies, sellers will have the luxury of objective rumination.”
However, she cautions that online valuations which rely solely or mainly on information submitted in questionnaire form could easily result in inaccurate valuations.
“These days it’s very easy today to make use of virtual meeting technology in order to ‘meet’ and chat with prospective clients and to do a “virtual viewing” with them whilst they walk you through their home with a video app“.
“Marketing presentations can also be done via a shared screen situation and emailing the client relevant information before the meeting. So, if anyone wants a marketing presentation or a market evaluation from us, it’s business as usual, we just won’t be sitting in the same room.”
“It’s also important to realise that, at the end of the day, agents are only really in control of the marketing of a property,” says Cilliers.
“The condition of the property when it goes to market falls to the seller and the eventual sale price of the property is ultimately controlled by the market conditions, the demand and the price that the seller is prepared to accept“.
“Therefore, it’s imperative that sellers choose an agent and agency based on their marketing offering, together with the experience and track record of the agent and agency concerned. They use their experience to advise and guide a seller regarding price, but they do not determine the final sale price.”
Ultimately, the goal is to achieve a speedy sale at the best possible price and, in order to do so, not only must the property be realistically priced for the current market, it must also be properly marketed, all of which require experience and knowledge and the backing of a reputable agency.
“There’s no point in getting excited about high-end valuations if the realtors and their brands don’t have the local, national and even international reach on the correct platforms to communicate with a wide targeted audience of serious buyers,” says Cilliers.
“The importance of a comprehensive marketing strategy when selling a home should never be underestimated, especially in a tougher market, as it can significantly impact the final sale price realised as well as the length of time it spends on the market. And, in terms of the EAAB regulations, a mandate presentation by the agent must include a marketing plan“.
“Choosing an agent based on their skill sets, the company’s marketing ability and their track record in an area is a way better way to go – sellers should selecting the right agent for their needs based on the quality of their offering rather than pricing“.
“This can be done by asking several agents from different agencies to submit marketing proposals that outline their strategy and reach and also posing questions about other salient points like their recent sales in the area“.
“Once you have decided which agent and agency can offer you the best marketing for your home, it’s then easy to have a frank and honest discussion to determine a sale price and discuss other factors like the photographs and videos.”
So, what should sellers be looking for in a winning marketing plan?
“Our tagline ‘Today’s reality calls for Virtual Reality’ is not only really relevant during the current crisis but also going forward when the traditional way of showing homes will have changed, even when the restrictions have been eased“.
“Going forward, people will want to spend less time viewing homes in person and the ability to view a 3D walk through, such as a Matterport Scan, at their leisure will limit the need for unnecessary viewings in an environment where clients and agents will be trying to limit their potential exposure to COVID 19“.
“Strategic digital marketing can help agents reach a broad demographic of potential buyers at a pace never imagined during the reign of print advertising, and studies of consumer brand interaction reinforce why it’s vital for sellers to select a real estate company that has a strong online presence”.
“An optimum marketing strategy should now include social media, database advertising, property search portal and app placements, digital media showcasing, virtual and physical show days, outdoor boarding and high-end print material.”
However, Cilliers cautions sellers to also look beyond the digital aspect as even the best plan on paper requires a personal element for effective execution.
“When it comes down to the wire, having a professional, experienced and legally-savvy estate agent at your side and making use of all the latest tech offerings, is critical to ensure a seamless sale that doesn’t reveal any ugly, costly surprises weeks or months later.”
Cilliers concludes: “The key factors in moving property, especially during the next year or two, will be experienced agents who can adapt to new marketing techniques, with good databases and extensive marketing to the right demographic and, of course, realistic pricing.”
Source: Propertywheel.co.za | https://propertywheel.co.za/2020/05/why-market-valuations-should-always-be-expressed-as-a-range-between-two-values/