When selling your home it’s important to make a good first impression. Newly listed homes generate the most interest within the first couple weeks of being listed. After this time, there is typically a slow decline of traffic which leads to new decisions having to be made if your property doesn’t sell. In most instances, this means price reduction.
Location has typically been the driving force behind many buyers decisions. In today’s real estate market, there have been many indications showing that buyers will browse multiple locations to see where they can get the most for their money. Pricing your property at the right price has always been an important factor but with these new trend shifts it has become even more crucial in achieving a timely sale. If you don’t maintain your competitive advantage in the real estate market you will likely end up with a “stale” listing that takes much longer to sell. No one wants their home to sit on the market as it can interrupt the buying process, especially if you have chosen to buy before selling. For this reason, it’s important you set the stage for a successful sale by pricing your home competitively and at a fair price.
When it comes to pricing your property you need to have accurate comparables that reflect the activity in your market. Your Realtor will provide you with this information so that you can come up with a reasonable price. If your property is a 2-storey home then your comparables should also be 2-storey homes. Mixing in ranches, bungalows, side-splits, etc. with the comparables to arrive at a price is not going to lead to a proper pricing model. Compare oranges with oranges, don’t include apples.
After you have gathered your comparables, it’s time to adjust the price by assessing the amenities in your home compared to the others in the area. This is where a Realtor can be an invaluable asset. A seller can become easily biased in regards to the features their home offers over others due to the emotional attachment. Selling a home is an objective process. Emotions need to be set aside in order to effectively sell your home.
Local activity becomes a major player in the decision. Just because you feel your home is worth a certain value, doesn’t mean you can get that amount. You have to take into consideration the prices people are willing to pay in the area you live. If this means you need to sell for lower than expected, you have 2 choices: accept the price, or don’t sell. The comparables should clearly show the price needed to have a competitive advantage in your real estate market. Don’t let this discourage you from selling because it’s quite possible the activity is similar in the location where you want to buy. For instance, if you are upgrading to a home $100,000 more, you may have to sell yours for $10,000 less than you expected. If the activity in the area you wish to buy is similar then you may save $20,000 on your next home. It’s still a positive outcome, it all depends how you look at it.
If you choose to price higher in order to leave wiggle room for negotiation, you may end up selling for less than you would have by pricing competitively. For example, if you price $10,000 higher and need to drop $10,000 later because traffic has died off, a buyer will see the property has been on the market for a long period and offer even lower, possibly another $10,000 lower. Why would you want that situation? Buyers will pay fair price and take all things into consideration when making an offer, including listing duration. So in the end, you may get the same results but with less traffic. As already stated, less traffic means less chances to sell. Don’t gamble with your largest investment.
By pricing competitively you may even generate enough interest to attract more than one offer. This could lead to a final sale price being more than you would have gotten had you listed at a higher initial price. Once buyers become emotionally attached to a home they don’t like losing it to another buyer.
Be realistic with selling your home. Your Realtor can guide you through the whole process and assist you in making the right decisions. Selling your home can be a very rewarding experience if approached properly. Good luck selling and enjoy your new home!
A blog helping people understand more about Real Estate in Ontario and Canada