Hands down it is the primary concern when putting your house up for sale: How should I price my home?
Finding the perfect price can be like a juggling act. List your home at a price too low and you risk missing out on thousands of dollars. List your home at a price too high and you risk it sitting on the market for too long. Or you risk having to reduce the price later on and come across as a desperate seller. These are just some of the trade offs when deciding the exact price to list your home.
However, determining the best listing price for your home doesn’t have to be painful. If you are logical, do your research and seek the advice of professionals you can decide on the ideal list price. Here are some tips to get you started on determining the ideal listing price for your home.
1. Be Objective and Realistic
When you first sit down to determine a list price it is crucial to set aside any emotional sentiment to your home and any notions that you can list the home slightly above what you paid for it. There are a number of time and market specific factors that will influence the list price of your home. Be prepared to take on a realistic perspective.
2. Get a Professional Assessment
By talking to a few different agents you can get a better idea of what your house is actually worth in today’s market. You can also hire a certified professional appraiser to come look at your home. Agents and appraisers can conduct a Comparative Market Analysis (CMA) that will show homes similar to yours that have recently sold, are currently on the market and homes that were on the market but never sold. This analysis is only a starting point to determine your own pricing strategy.
3. Do Your Own Research about the Competition
Research what other homes in your neighborhood have sold for in the last couple of years. If you live in a townhouse or condo how many other units have sold in the past year? How many other units are currently for sale in your complex and what are they priced at? The bottom line is you have to answer the question, “What is the demand for a house like mine in this area?” and “What is my competition for buyers looking in my area?”
4. Look at the Comparables of Nearby Homes for Sale and Listing Prices
While you assess other homes currently on the market it is equally important to know what homes have actually sold for in the recent past. You need to know what they are actually getting. You should also look at the difference between list price and selling price … in your market are homes being sold for the list price, 5% less than the list price or (in a seller’s market) 5% more than the list price? This can help you mentally prepare for what you will actually sell your home for and how your local market operates.
Remember that while you can research what homes were listed and actually sold for you don’t always see the details of the transaction – there could be other pricing details such as seller-financing, lease-options, closing dates and other costs that ultimately affect the total selling price.
5. Market Conditions You Can’t Afford to Ignore
As much as your can evaluate comparables it is important to account for outside influencers on the real estate market:
- Time of Year – is it Spring and the market is active or is it Winter and the market has less interest?
- Interest Rates – are banks making it attractive for buyers to buy now; are rates set to increase soon; is it tough to get financing?
- Economy – what is the overall impression of where the economy is heading? Is it a reasonable time to invest in real estate?
- Local Job Market – is your city attracting new people with jobs? Are businesses closing down?
Never underestimate the power that influencers such as these can have over people’s decision making process.
6. Consider Your Personal Time Frame and Strategize Accordingly
If you need to sell yesterday or if the market where you plan to buy is a hot buyer’s market you may want to price your house to sell fast. Listing at a lower price could help you come out ahead if it means buying your new house at a great price. However, if you have more patience and time to wait to sell your house you may not have to price your house so aggressively.
7. How Does the Property Show?
Even though you are rational as a seller doesn’t mean that buyers are going to be irrational. I know of a buyer who choose one condo unit over another simply because of wall color. So in light of the comparables on the market, how will potential buyers perceive your home? Is your home well tended and maintained? Has the kitchen and bathrooms been updated? Is the roof, siding and windows new or in good condition? Are there any obvious repairs that need to be done right away (increasing the total purchase price in the mind of the buyer)? If you want to sell your home fast also consider how your home is cleaned and staged.
8. Test It Out – How Does the Market Respond?
Once all the research is done and you have settled on a price you just have to list and wait to see how the market responds. Within the first few weeks you should have a good idea of the list price. Are a lot of people interested in the home? Have there been any second viewings or offers made?
Your real estate agent may also invite colleagues to walk through the home without knowing the list price and give feedback on how they think it should be listed. This helps you to know where your price stands and how other agents will advise their buyers if they become interested in your home.
If you make a mistake with the original listing price – it’s not the end of the world. Correct any pricing mistakes quickly so that you can generate more interest.
I would be more than happy to provide professional real estate advice in pricing and listing your home. If you would like assistance in this process please contact me by phone at 778-316-4290 or email our Sutton Real Estate Agent. We specialize in local Greater Vancouver neighborhoods including Surrey, White Rock, Langley, North Delta and more!
Start looking at comparables in your neighborhood with our Free Sutton BC Homes Search Tool.