Setting a realistic price based on current market value will help you sell your home quickly and for top dollar. When you price your home properly, you increase the chances of getting an offer close to your asking price. You might even get competing offers, which might end up in a higher price for you.
Some sellers believe that the best strategy to get more money is to list their house for the highest possible price. They think to try that for a few weeks and then lower the price later. Expert realtors will tell you that this is not a good strategy. It has been proven that setting the price too high might result in you having to sell the house for a less price. A professional realtor can help you choosing the right listing price for your home.
Your house has the best chance of selling within its first seven weeks on the market. Statistics show that the longer a property stays in the market, the less it will ultimately sell for. A property priced 10 % more than its market value is significantly less likely to sell within this time frame. Sellers will usually overprice their homes by 5-10% if they believe the home is worth more than what the market indicates, or if they want to leave room for negotiation. Either way, if you choose to overprice your home by this amount, you run the risk of not selling the house in a reasonable time, which therefore decreases the price you’ll ultimately receive. Or, you might not be able to sell your property at all.
Early activity is key. As soon as the house is listed, buyers will notice. If the house is overpriced, they will lose interest in it and you will miss the right buyers. Later, when the price is dropped, buyers will still not have much interest because they will think there is something wrong with the house since it didn’t sell. Eventually, because of this, you might have to drop the price below what the house is worth, in order to sell it.
You don’t want to price the house below a fair market value either, because then you will make less money. Underpricing usually occurs when the owner is interested in a quick sell.
The knowledge and skills of an experienced realtor will be invaluable when determining an appropriate asking price. Your realtor knows the real estate market, and he is aware of other properties currently for sale in your area. He will advise you on how to price your home properly in order to get the highest price and in the shortest period of time.
One factor that will influence the house market price is the kind of real estate market at the given time, which could be:
1. Seller’s Market: hot market
This happens when demand is greater than supply. That means the number of buyers is higher than the number of homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers. Many homes will sell above the asking price.
2. Buyer’s Market: slower market
This happens when supply is greater than demand. The number of homes exceeds the number of buyers. Properties stay on the market for longer time. Fewer offers will come in. Prices may even decline during this period. Buyers will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is too low, sellers will be more likely to come back with a counter-offer.
3. Balanced Market
Supply equals demand, the number of homes on the market roughly equal to the number of buyers. When a market is balanced there aren’t any concrete rules guiding whether a buyer should make an offer at the higher end of his range, or the lower end. Prices will be stable, and homes will sell within a reasonable period of time. Buyers will have a decent number of homes to choose from, so sellers may encounter some competition for offers on their home, or none at all.
Remember, a realtor is trained to provide clients with this information about the market, helping you make the most informed decision possible. The right realtor will guide you through the ups and downs of the market and keep you up-to-date with the types of changes you might expect.
Factors that affect market value:
1. Location:
The location is the number one factor in real estate. The quality of the neighbourhood (quiet or noisy street, residential vs. commercial, low crime or high crime) will influence the price. The proximity of your home to amenities, such as schools, parks, public transportation, and stores will also affect the market price.
2. Property:
The age, size, layout, style, and quality of construction of your house will affect the market value, as well as the size, seclusion and landscaping of the yard.
3. Condition of the Home:
This includes the general condition of your home’s main systems, such as the furnace, central air, electrical system, etc., as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances.
4. Market Conditions/ Economy:
The market value of your home is additionally affected by the number of homes currently on the market, the number of people looking to buy property, current mortgage rates, and the economy.