After deciding to sell your home, one of the most critical decisions is the price! If you price it too high you may have your property on the market for longer than need be and you may get less than its actual market value. If you price too low you may be short changing yourself.
Here are some common pricing strategies:
1. PRICING BELOW MARKET VALUE AND ENTICE (HOPE FOR) A BIDDING WAR
This past spring this strategy was utilized more often than normally seen. It seemed to work for certain areas and properties. This was most likely due to a lower supply and a still extremely high demand. It can be an effective way to increase interest and in turn hope that multiple offers ensue. Unfortunately this strategy doesn't always work. A seller needs to accept the fact that it’s possible that come ‘offer night’, no one shows up. Sellers also have to prepared to list lower than the true value of the house in order to attract attention, which can be risky if you don’t get multiple offers.
Another angle to consider is that this strategy can disillusion buyers...
Although this strategy can be effective in the right time and place, it's up to the sellers to weigh the risks and benefits of going this route with a real estate agent who truly understands their market and neighbourhood.
2. PRICING ABOVE MARKET VALUE AND HOPE AND PRAY (NEGOTIATE)
This strategy seems to come about much more than it should. Sometimes it's well planned out and other times sellers can be overly optimistic!
There are 3 important things to keep in mind about this strategy:
- Most people-buyers and agents included-don't like to negotiate.
- Buyers seem to be most excited about new listings for the first couple weeks,
therefore properties that sit on the market for too long tend to get a lower price than they should have.
- Once it's listed, having your home on the market for too long can be challenging-not to mention a lot of work-if you are still living there.
3. PRICING AT MARKET VALUE
To some this may seem too safe. It is, however, proven to be the best bet to get a good price and move it in a short period of time. It does depend on the seller getting guidance from an agent who knows the neighbourhood market and how to properly value a home.When it comes to determining the market value of your home, I will look at:
- recent sales on your street and in your neighbourhood;
- properties that are currently on the market;
- the current market conditions
- ways to stage/improve your home in order to ease the sale process
Don't hesitate to ask!