Selling your home is a big decision and can feel overwhelming. You don’t want to overprice your property and drive away potential buyers with an inflated number or under-price it and lose money. Also, many buyers are well educated about real estate values so it’s imperative that your home is correctly priced to ensure a quick sale. So how do you establish the right price?
First, as a homeowner, you should keep in mind that the value of your property is not determined by what you paid for it, or what you owe on the property. “The value of a property can be affected by many factors, including location, specification, age, size, view and additional features and amenities,” says Sofia Underabi, partner and head of residential valuation at Cavendish Maxwell. Basic forces such as social, economic, government regulations, environmental conditions, and unforeseen events such as the Covid-19 pandemic can also affect the value of a property. It is, therefore, crucial to look at your property holistically and objectively.
“You need to adopt an evidence-based objective stance on your property, which can be difficult to do for some homeowners, because you love your home and you’re proud of it. But you have to be objective and look at the positives as well as the negatives of your property,” says Richard Paul, head of professional services and consultancy at Savills Middle East.
Look at capital value
Don’t just ask for dirhams per square foot; this is a crude method of forming an opinion of value and it doesn’t generally work, according to Paul. “Think more capital value figures. What’s being sold and at what price? Then you can form a better opinion about things,” he says. Also, keep in mind that the asking price does not translate to the sales price as listed prices are subject to negotiation and thus, you’ll need to apply an adjustment to this rate.
Check similar properties
One of the best methods of estimating the selling price of a residential property is to look at the prices that were recently paid for similar or comparable properties. ”Source the most recent, most suitable transactions of similar type and size units which have recently sold - remember date is very important - within the same precinct or tower,” says Cheryl McAdam, director of residential valuations at UAE-based local consulting firm ValuStrat. Also, spend time looking at neighbouring communities, and see what else purchasers would look at and what the competition is for similar amounts of money.
“A lot of people will look at their building only. However, if there is a better building next door and it’s offering better apartments for the same amounts of money, people might prefer those units over yours. So, make sure to be aware of neighbouring properties,” says Paul.
Checking local online property sites is a good start but it’s not enough. “Speak to more than three well-known agents in the market who know your community and building well. Ask them for actual recent transactions and ask them not to just give you the highest prices that they’re aware of, but also a range of prices that this type of property has sold for – high and low,” says Paul. According to McAdam, knowledgeable brokers and property management companies can provide insightful information as to the period some units have remained unsold on the market for, and other units that have been recently transacted and not yet registered.
Determine value-adding factors
Take note of the specifications of your property such as floor height, unit size, and corner or internal position, and be mindful of factors that add value, such as great views or a spacious garden. “Views add value. Record the view; is it over the fountains, a canal, or an unrestricted sea view? Block or community view does not hold the same desirability,” notes McAdam, who is an MRICS chartered valuation surveyor with more than 22 years of property valuation experience. “Complete the site inspection noting improvements in the walls, gates, paving, landscaping, lighting, or recreational facilities, and observe surrounding landmarks, such as the nearest medical, financial, mall and other communal facilities. Consumer convenience and distance to amenities is a valued factor.”
At the same time, be honest with yourself and contemplate any negative features, such as proximity to a noisy road, a mobile phone mast, a substation, or a fast-food restaurant on the ground floor that lets off some smells. “These factors all need to be considered,” advises Paul.
Invest on upgrades cleverly
A lot of homeowners consider upgrades to be an advantage. However, according to Paul, one person’s upgrades could be another person’s downgrades and they don’t necessarily equate to value-add. “Sometimes changes to a property can actually detract from the marketability of that home. So be careful not to inflate any personal changes that you’ve done on your property into immediate value. Just because you spent AED 100,000 on a refurb doesn’t mean you will get that money back in value. Sometimes, people’s personal taste is another person’s horror show,” he says. Make sure that any changes or upgrades you make to your property will appeal to the biggest audience possible and not a very niche buyer who likes certain things in a certain way.