"My price may be on the high side, but bring me an offer!" "Just bring me an offer..." We hear the above phrase all the time... and we totally understand your thought process however it is important you also consider our thought process (based on years of proven “field tested” experience). Serious buyers look in the price range predetermined by their down payment and monthly payment ability. Unless your property is priced correctly, the down payment and monthly payment requirements will not be competitive forcing an otherwise potential buyer to not consider your property. A buyer who is seriously shopping quickly becomes very knowledgeable in his price range. If your asking price is too high it will only discourage this serious buyer from looking at and considering your property. In today's competitive marketplace if you are serious about selling your home you can't afford the luxury of playing games that could potentially cost you extra time on the market and possibly miss out on qualified buyers. As you can see from the graph below, 40% of homes sell within the 1st month they are on the market, therefore it is very important to price your home properly to insure the best use of that critical window.
Today's home buyers purchase by comparison shopping and a property priced above the competition does not "compare" favourably. Inviting a buyer to make an offer could indicate that a fair price has not been established. We understand your plan to adjust your price at the time of a sale, but it is far better to adjust the price now and attract serious buyers immediately. This strategy often places you in the favourable position of having more than one buyer interested in purchasing your home. It is very difficult to obtain a reasonable offer on your property if it over-priced. The buyer feels he should be just as unreasonable in his offer as the seller in his asking price. By contrast, offers are much easier to obtain if you reasonably price your property from the start. As well, negotiations are typically much shorter and far less aggressive. If multiple offers come you now have the luxury to choose which offer to accept that best meets your requirements. It is generally a mistake to believe you will get more for your property by asking more than market value. Statistically you usually get less because fewer buyers consider it when it’s first placed on the market. The "right buyers" will not see it, and it usually stays on the market so long it tends to become "shop worn” giving the indication there is something wrong with your property. Remember... MOST people buy with their emotions so if there is an impression something is wrong or a high price leaves a bad taste in buyers mouths it will not be a positive influence in the sale of your home. If you are serious about selling your home we highly recommend listing your property competitive to similar properties in price, terms, and condition in order to obtain maximum market exposure and to take full advantage of the "market appeal" of a new listing in the area.
It's Important to Remember...
1. Your real estate agent has no control over the market, only the marketing plan.
2. For your own best interest never select an agent solely based on your asking price.
3. How to respond to pricing in rising and falling markets:
- Overpricing your home in a rising market may be OK;
- Overpricing in a falling market is disastrous.
- Market trend is as important as pricing.
- Make sure your agent understands market trends and how to adjust your homes price accordingly.
4. Four kinds of numbers are used to represent your property
- Cost - What you originally paid plus capital improvements.
- Price - What you ultimately want for your home.
- Value - What a buyer is willing to pay for your property.
- Market Value - What a willing buyer and yourself will agree upon.
5. Regression and progression
- Regression - the phenomenon of an expensive house being decreased in value because of the lesser desirable homes around it.
- Progression - the phenomenon of a home selling for more than its worth because of having more expensive property or a more desirable area around it.
- The value of an amenity is based upon what it will produce not what it will cost.
7. Reasons for overpricing
- Over Improvement – many renovations carry sentimental value to the seller and it's not realistic to expect a buyer to see the same value in them. On a side note there are certain home improvements if done properly will increase the value of your home far beyond the price of the renovation itself.
- Need - the need for money does not increase the value.
- Buying in a higher priced area does not necessarily increase the value.
- Originally paying too much for the property does not increase the value.
- Lacking factual comparables to your property does not increase the value.
- Providing bargaining room does not increase the value.
8. The first few weeks your listing is on the market is it's greatest opportunity to make an impact on buyers and real estate agents. As a result it is very important your home "shows" the best it possibly can and be priced properly during these weeks for the best chances of a sale. 9. Make sure your real estate consultant understands the philosophy of buying up in a down market. Click here to ask us what this means... 10. Key Benefits to Proper Pricing of Your Home:
- Faster sale for your home which will save you carrying costs - added value.
- Less time spent worrying whether your property will sell
- Less time fussing over preparing the house for showings
- The sooner it sells the sooner you can finalize this chapter and move on to your new chapter in life
- Exposure of your home to more serious prospects
- Increased salesperson response
- Better response from advertising the sale calls
- Attracts higher offers leading to more money in your pocket.
These pricing strategies were prepared to help you understand the complexities and necessity for you to properly price your home from the beginning of your listing. It is fully in our best interest to do our utmost to help you achieve your goals which is to sell your home in the least amount of time for the most amount of money possible.Posted by AJ Hazzi on