The most important decision you will make with your Realtor® is determining the right asking price for your property.
Once you have achieved a realistic sale price, you can count on your property being professionally marketed and promoted to bring more buyers to your door. You can also expect to sell your home for the best possible price in the least amount of time.
The benefits of Pricing Right
- Your property sells faster, because it is exposed to more qualified buyers
- Your home does not lose “Marketability”
- The closer to market value, the higher the offers.
- A well-priced property can generate competing offers
- Realtors will be enthusiastic about presenting your property to buyers.
Determining the Value of Your Home
The market ultimately determines the true value of your property.
Before you compare your home to similar properties and establish a competitive list price, the following points should be considered:
- Community Amenities
- Buyer Supply
- Financing Options
Getting to Know Your Market
A comparative market analysis is an indicator of what today’s buyers are willing to pay for a home. It compares the market activity of homes similar to yours in your neighbourhood. Those that have recently sold represent what buyers are prepared to pay. The homes currently listed for sale represent the price sellers hope to obtain. And those listings that have expired were generally over priced or poorly marketed.
Understanding the Factors that Influence Overpricing
- Extensive renovations/ hidden costs
- Desire to purchase in a higher-priced area
- Original cost of the home was too high
- Lack of real market information
- Building in “bargaining room”
- Perceived emotional value
The Result of Overpricing
Many sellers believe that if the price their home high initially they can lower it later.
Often, when a home is priced too high, it experiences little activity. Gradually, the price will come down to market value, but by that time its been for sale too long and some buyers will be wary and reject the property.
On occasion, the price is dropped below market value because the seller runs out of time. the property sells for less than it’s worth.
Missing the Right Buyer
You may think that interested buyers “can always make an offer”, but if the home is over-priced, potential buyers looking in a lower range will never see it.
Those who can afford a home at your asking price will soon recognize that they can get better value elsewhere.
The Importance of Early Activity
As soon as a home comes on the market, there is a flurry of activity surrounding it. This is the crucial time when Realtor and potential buyers sit up and take notice.
If the home is overpriced, it doesn’t take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.