Sellers's Guide
Planning and Pricing
Pricing Your Property
Determining the right asking price for your property by weighing all the
determining factors of the real estate market with your real estate agent
is the single most important decision that you will make.
Understanding market conditions
A comparative market analysis is an indicator of what today's buyer is
willing to pay. It compares the market activity of houses similar to yours
in your neighbourhood...
- homes that have recently sold represent what buyers are prepared to pay
- homes currently listed for sale represent the price sellers hope to obtain, and
- homes whose listings have expired were generally overpriced or poorly marketed.
What sets market value?
Market value is set by the purchaser, that is, what the purchaser is willing to pay.
Certain factors insure marketability of a property, though the age-old maxim
"LOCATION, LOCATION, LOCATION" still holds true. You should also
consider the following:
- Economic conditions in your area and/or community
- Changes in tax laws, zoning restrictions, reassessments of property
- Supply and demand sets either a buyer's market or a seller's market -- where there are more buyers than sellers then the house prices will start to go up.
- Seasonal fluctuations in some areas
The benefits of pricing right
Once a realistic selling price is achieved you can expect to sell your home
for the best possible price in the least amount of time. There is no advantage
to overvaluing your property just as there is no advantage to undervaluing
your property.
Other benefits of pricing right include that your property will sell faster because it is showcased to more qualified buyers
- your home doesn't lose its "marketability"
- the closer to the true market value, the higher the offers
- a well-priced offer can generate competing offers
- other real estate professionals will be enthusiastic about presenting your property to their buyers
Determining the value of your home
The market ultimately determines the true value of your property.
Considering the following points will help you establish a competitive list price before you compare your home to similar properties.
- Location
- Style
- Community
- Buyer Supply
- Size
- Condition
- Amenities
- Financing Options
Overpricing
Factors that influence overpricing include requiring a "set amount"
Considering the following points will help you establish a competitive list price before you compare your home to similar properties.
- extensive renovations and hidden costs
- a desire to purchase in a higher priced area
- that the original cost of the home was too high
- a lack of real market information
- building in "bargaining room"
- a perceived emotional value
What happens when you overprice?
| Fiction | Fact |
|---|---|
| Many sellers believe that if they price their home high initially that they can lower it later | Sure you can lower the price later but you have missed out on the critical period of activity when a home is first listed. When a home is priced too high it experiences little activity and even though you gradually come down to market value it has been for sale too long and some buyers will be wary and reject the property. |
| Lower the price and the property will sell. | Sometimes you have just run out of time and in order to sell you will have to drop the price to below market value and the property will have to be sold for less than it is worth. |
| Interested buyers can always make an offer. | Interested buyers may make a decision that it is not affordable and not make an offer. Potential buyers looking in a lower price range may not even see it. |
The preparation of a comparative market analysis of your property by comparing your home with other houses for sale in your area, especially those that have previously sold, is the information that assists you in arriving at a competitive and realistic asking price.
