Today's home buyers are more savvy and educated than ever before. When buyers are shopping around for a home they know what they are looking for. They will also be working with a real estate agent who is looking out for their best interest and will have educated them on the value and price of type home they are looking for.
Pricing at Market Value
Pricing your home at ‘market value’ from the outset of the listing is one of the most critical actions you can take to sell your home faster.
Market Value: Home listing prices are based on the current ‘market value’ of the properties. The market value of a property depends on many factors, such as its location, size, proximity, size of lot, design, quality of construction, age, condition, number of bedrooms and bathrooms, garage, etc. The two biggest factors that determines fair market value is the SOLD price of similar homes that have sold in the recent past as well as supply and demand of similar homes.
What to Base Your Price On
- Current Market Conditions
- Comparable Properties Active on the MLS
- Comparable Properties Sold on the MLS
- Neighborhood & Product Categories
- Home Improvements & Upgrades
It must be noted that the value of a property does fluctuate over time. The change in zoning bylaws, economic status, mortgage interest rate, supply and demand conditions in the market will have a major and immediate impact on the value of properties.
Pitfalls of Overpricing
Don’t wait to price it right. Many sellers like to believe that they can test a higher price and reduce the price later if there isn’t sufficient interest or if they don’t receive an offer in a predetermined time frame. After 30 or 60 days of your home being overpriced you have lost valuable time and the attention of potential buyers. The longer your home is on the market at an incorrect price the longer it will take to sell.
Overpricing your home can cost you more than just money. While you are waiting for the “right buyer” who is willing to pay the inflated price you are continuing to pay for carrying costs such as mortgage payments, utilities, etc. Depending on your personal situation this cost can be compounded by carrying 2 properties. It is also costing you time and effort (often times stress) with the task of preparing your home for showings, vacating your home for showing and putting off moving onto the next phase of your life.
Your home can become ‘stale’ on the market. The longer a home sits on the market, buyers will ask questions like “what is wrong with this home?” or make assumptions like “if it hasn’t sold after this long there must be something wrong with it.”
The price of a home is the most important factor in gauging if a home has a chance of selling. An objective analysis of your property and current market conditions will determine how to set a fair market value. To help you understand where to strategically position your home on the market our Okotoks & Calgary Real Estate Team will walk you through a full Comparative Market Analysis (CMA) to help determine the best price for your home.
Timing the Market Doesn’t Work