Sellers - Overpricing Can Cost You
Pricing a property for substantially over what the market will support can cost you money in the long run. As the property sits longer and longer the price it will sell for drops also. Make sure that the price that you and your agent determine is supported by the market comparables and current conditions. You can ask any price you want for your property, but that doesn't mean it will sell for that amount. Ask your Realtor how many of their listings sell and how many expire. Have a look at the Active listings in your neighbourhood and consider how long they have been on the market then strategically price your property.
As a Seller, it is very important that you work with a Realtor who has extensive market knowledge and can back that up with the current and past market stats to show you how to achieve the best price to get your home SOLD. Make sure your Realtor knows your area inside and out - It doesn't make sense to work with a Real Estate Professional who has never worked or lived near your area. I specialize in West Vancouver and North Vancouver, and I could not claim to be an expert in, for example, Port Coquitlam because I have not spent enough time there currently to be fully informed in that market.
If your Realtor truly has your best interests in mind then they will make sure that you receive the highest value for your home while selling it in a reasonable period of time. If the house is listed at an unrealistic price it will not sell and the Realtor is not doing what you hired them to do. Ask questions of your Realtor. Ask them how familiar they are with the local neighbourhood, the shopping, the schools, the recreation facilities.
As Real Estate markets are dynamic and shift frequently, a Seller of an overpriced property runs a risk of finding themselves in a market that has dropped substantially from the one they started in. We all know someone this has happened to. Because most peoples greatest financial asset is their home, that effect can be devastating.
Factors that Influence Overpricing
1. Extensive renovations / hidden costs
2. Desire to purchase in a higher-priced area
3. Original cost of home was too high
4. Lack of real market information
5. Building in "bargaining room"
6. Perceived emotional value
The Result of Overpricing
Many sellers believe that if they price their home high initially, they can lower it later.Often, when a home is priced too high, it experiences little activity. Gradually the price will come down to market value, but by that time it's been for sale too long and some buyers will be wary and reject the property because they start to wonder what is wrong with it.
On occasion, the price is dropped below the market value because the seller runs out of time. The property sells for less than it's worth.
Missing the Right Buyer
You may think that interested buyers "can always make an offer," but if the home is overpriced, potential buyers looking in a lower price range will never see it.Those who can afford a home at your asking price will soon recognize that they can get a better value elsewhere.
The Importance of Early Activity
As soon as a home comes on the market, there is a flurry of activity surrounding it. This is a crucial time when Real Estate Professionals and potential buyers sit up and take notice.If the home is overpriced, it doesn't take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.
How to Determine the Value of Your Property
Before you compare your home to similar properties and establish a competitive list price, the following points should be considered:
- Community Amenities
- Buyer Supply
- Financing Options
A comparative market analysis is an indicator of what today's buyers are willing to pay for a home. It compares the market activity of homes similar to yours in your neighborhood. Those that have recently sold represent what buyers are willing to pay. The homes currently listed for sale represent the price sellers hope to obtain. And those listings that have expired were generally overpriced or poorly marketed. If you work with me, I will prepare a comparative market analysis for your home based on the most current market information. Together you and I will establish the proper list price for your home.
Pricing Your Property
The single most important decision you and I will make is determining the right asking price for your property.
There are three main points to consider when pricing your property:
- 1. Know the Market - the market ultimately determines the true value of your home
- 2. Condition of a Home - Buyers base their decision on the condition of the home in relationship to the price
- 3. Selecting a Real Estate Professional - The right sales representative brings the market to you. The market brings your price. The right Realtor is the one who knows the market, and can get you the best price possible, not the one who promises you the highest price just to get you to list with them.
The Benefits of Pricing Right
- Your property sells faster, because it is exposed to more qualified buyers.
- Your home doesn't lose its "marketability."
- The closer to market value, the higher the offers.
- A well-priced property can generate competing offers (this is only effective in a certain type of market)
- Real Estate Professionals will be enthusiastic about presenting your property to buyers.
When I work with a client, achieving their Real Estate goals are my top priority. I believe in staying informed and up to date about my local market so that I can share that with my clients. Getting a house ready to sell is hard work. Keeping it that way is even harder. My goal is to price your home right and get you top dollar for it quickly. The easier I can make this process for you the better. Call me if I can give you any information on North & West Vancouver. I would be delighted to share what I know.
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