The Size and State Of The Local Property Market
The number of successful property sales that have been concluded in your area is a key factor to consider. Ask your agent about the sales activity over the past 12 months, you could also get this data online at lightstone.co.za or saptg.co.za. Higher sales numbers are usually better for sellers and fewer sales are better from a buyers point of view.
If there are lots of sales being concluded every month, it shows that there is a strong demand for properties in that area. This often leads to higher property prices.
If there are only a few sales being concluded every month, every seller in that area is having to compete to attract a small number of serious potential buyers - causing a drop in property value.
The Prices Of Properties In Your Area
There are two things to consider when looking at the prices of properties in your area. The first is, what are the prices of similar homes and the second is what are the average prices of houses in your area.
As a seller you can competing with other sellers of similar properties in your area. In this case you need to price you property accordingly. If you price it too high, buyers will be more attracted to other other properties.
Also the average price of properties in your area will also have a bearing on your property value. As you can imagine, a mansion among shacks will be valued less. And a cottage in a neighbourhood of mansions will go up in value.
Common wisdom in real estate investing says that you should look to buy the cheapest property in the best area and location that you can easily afford.
images by hiperdelic & marc_perel