Home pricing strategies have changed over the years, so don’t fall victim to the wrong one. The bottom line is if you’ve got the right Realtor®, he or she will make sure you understand all of the factors associated with pricing your home to sell fast and for top dollar.
There was a time when real estate pricing theories recommended pricing your property higher than you hoped to get for it, suggesting that a higher-priced listing could bring in more lucrative offers overall. The theory was, while you may not get your full list price, you would still end up with more than you originally aimed for. An alternative strategy had sellers listing quite low, banking on a bidding war between desperate potential buyers. Both of these strategies are high-risk plays and, in today’s market, is not very kind to gamblers.
Today’s buyer is market savvy, has done their research, and does not take kindly to being toyed with when it comes to pricing. Listings that are priced too high tend to sit on the market without viable offers. The longer they sit, the lower their perceived value becomes. If you’re quick to make a correction and don’t wait too long to reduce your asking price, you can help overcome this issue, however, if you wait too long, often the damage has been done and stigma has been attached to your property which can result in a lower sale price.
1. Have your agent do a thorough comparative market analysis.
2. Factor in your property’s distinctions.
3. Find a Realtor® that you can trust and then trust them.
In Barrie, for example, from April 1 – June 30, 2018, homes that sold within the first 7 days of listing got 4.41% more than the asking price. At the 13-18 day mark, the average seller got just under asking, and sellers whose homes sat on the market from 31-36, days got 97.66% of the asking price. At the 61 day mark, the average seller got 95.86% less than the asking price. (IMS Statistics, July 23, 2018)
What does that translate to in dollars and cents?
On a $500,000 home, the average seller got over $22,000 more in their pocket when the home was priced correctly, or just over $20,000 less when it wasn’t.
The bottom line: Your home is worth what current local market conditions value it at. The closer you can get to that value, the more likely you are to sell your home quickly and at the best possible price.
Compare local listings and price your home relative to the current micro local market; the more recent and closer to your property, the better.
What has sold in the last few months in your area and what sales are currently pending? How long did these listings sit on the market and what was the difference between the selling and asking price? What had to be taken off of the market that did not sell? What features are in the homes that did sell recently? What special conditions are popular for local buyers? What buyers will have shared interest in your listing and what other properties will compete directly with your listing. Get a head start, view our recently sold listings.
What makes your home unique when compared to other local properties on the market and is it a plus or a minus on the pricing balance sheet? For example, if a home has an amazing view, a chef’s kitchen, an entertainment area with a bar to host friends or family, you will want to factor those into both the price and the marketing. If you’re selling a condo, let potential buyers know that your home is the ticket to living a maintenance-free lifestyle. Your Realtor® should also help you to hit some of your home’s weaknesses on the head. For example, advertising your small backyard as practically maintenance-free will appeal to a segment of the market that will find less mowing attractive. Likewise, if there are issues with your property that present a challenge, you need to develop a strategy to address them.
Although listing features may be easy, understanding how they contribute to the pricing is not cut-and-dry. For example, a swimming pool can add value to a home, but not always if it is situated on a tiny lot. Or, if your listing is close to a railway track, or has fewer bathrooms than other comparable listings, you need to be realistic about how this could affect the overall value of the home and either reflect this in the price or come up with an alternative offer that counteracts the problem.
Your Realtor® is there for a reason. Their expertise can guide you through these tough issues. A good Realtor® will already have the inside track on how local market conditions will likely influence your listing price, and if they are really good, they will be honest with you. Instead of telling you what you want to hear, they will let you know what realistic pricing strategy will bring about the best possible outcome for your property.
You don’t have to take them alone.
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