When it comes to selling your home, establishing what it's worth before putting it up for sale is crucial because sellers who demand over the odds may have to watch their home linger on the market – and the longer it remains, the less interest it will attract as potential buyers will assume there must be something wrong.

This is according to Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty who adds that, in addition to the time wasted, is the likelihood that the asking price will need to be slashed - perhaps multiple times - and the owner risks selling their home for less than they would if they had started with a more accurate valuation.

“When it comes to determining the value of a home, there are numerous factors that play a significant role, such as location, size, condition, and market trends, however, there are several misconceptions about what influences a home's value.

“Many people mistakenly believe that certain factors have a substantial impact on their home's worth when, in reality, these factors have little to no bearing and by including them in the calculations, they are likely to end up with an inaccurate price point.”

1. Personal Preferences:

One of the most prevalent misconceptions is that personal preferences and tastes significantly impact a home's value. While you may have invested in expensive upgrades or renovations that reflect your personal style, potential buyers may not share the same taste.

Features such as bold paint colours or customisations tailored to your preferences might not necessarily increase your home's value in the eyes of prospective buyers. Instead, focus on timeless and universally appealing design elements when making improvements to your home.

2. Home's Purchase Price:

Contrary to popular belief, the price you paid for your home does not necessarily dictate its current market value. The real estate market is dynamic and influenced by various factors, including supply and demand, economic conditions, and local market trends.

Just because you purchased your home at a certain price point does not guarantee that it will appreciate (or depreciate) in value accordingly. Market forces determine your home's value, not its purchase price.

3. Cost of Home Improvements:

While investing in home improvements can enhance your living experience and potentially attract buyers, not all upgrades translate into a significant increase in your home's value.

Upgrades such as swimming pools, high-end appliances, or extravagant landscaping may not yield a favourable return on investment. Moreover, the cost of renovations does not necessarily equate to an equivalent increase in your home's market value. It's essential to weigh the costs and potential returns of home improvements carefully.

4. Neighbourhood Trends:

While neighbourhood trends and developments can certainly impact the desirability of an area, they do not always directly influence your home's value to any notable degree.

With the exception off good schools, new amenities such as restaurants, or retail establishments in your suburb can enhance the overall appeal of the area but may not have a significant impact on individual property values.

However, certain negative factors such as a high crime rate are likely to impact the value of your home.

5. What Your Neighbour is Asking for Their House

Noticing a neighbour's home on the market has spurred many a seller into action - particularly when they're pleasantly surprised by the asking price.

However, although what other similar properties have sold for is helpful, before you get too excited, it's important to establish if the neighbour's home is of a similar size and condition to your own. And, even if it is, remember that the asking price is not the same as the sold price.

6. The Cost to Rebuild

Homeowners will be familiar with the insured amount on their building insurance policies if their home was destroyed and had to be rebuilt - but a home's rebuild cost is not the same as its market value.

The cost of rebuilding or the insurance value doesn't include the land that the house is built on - it's just the value of what might have to be repaired if, for example, it were to be burned down.

7. The Property’s Potential

Just because your neighbour has successfully rezoned their property for business use or got planning permission for an extension doesn’t mean you will too.

Potential business rights or the possibility to extend are not a reason to increase your selling price as the legwork to acquire the permission still has to be done – and it could be declined. However, if you do have formal planning permission or have successfully rezoned your property, that is a different matter and certainly worth a higher selling price.

“If you are thinking of selling, it’s a good idea to do some online research to get an idea of what similar properties in your area are selling for but if you want an accurate valuation of your property, ask an experienced estate agent who understands the local market.

“And if you do decide to go ahead and put your home on the market, by understanding these misconceptions and focusing on the key drivers of value, sellers can make informed decisions when pricing their homes and navigating the selling process.

“However, at the end of the day, the buyer is the one who decides what it's worth and the seller has the luxury of deciding if it's enough,” concludes Odendaal.