Everyone knows how much their home is worth. Don’t they?
It’s the conversation that can strike fear into the heart of even the most experienced real estate agent. A person’s home is often their absolute pride and joy. Often it has been home to wonderful family memories or the blood, sweat and tears that were poured into those stunning renovations. Then you throw the ever-discerning buyer into the mix. They have hunted the open-home trail for months, researched their preferred suburbs and compared homes upon homes. Ultimately, it is these people who will determine what your home is really worth.
So when it comes time for an agent to have the price-setting conversation with a seller, the reality of the market conditions can come as, well, a rude shock. It is often the case that the seller is sporting a lovely pair of rose-coloured glasses. What is a castle in their eyes could be – for lack of a better term – a shack in the eyes of the buyer.
When deciding how to price your property, there is often a disparity between what the seller expects and what the market is offering.
Here are a few key tips to help you through the price-setting process;
- Setting a realistic price will ensure you obtain your asking price and also conclude the sale promptly;
- Sellers who set a too high price on their homes can seriously damage their prospects for a quick sale;
- Facts and figures show that an overpriced property discourages serious buyers. When it remains on the market too long it redirects interest to more realistically-priced properties;
- Emotional attachment and pricey renovations often drive sellers to push the price up – and understandably so. However, unfortunately the state of the property market won’t always reflect personal circumstances; and
- Do your homework! Be sure to research the property market in your area and seek the opinion of a professional from a REIQ accredited agency;
A good start is an appraisal – an inspection to estimate the sale price of a property. An agent will appraise your property at no charge if you request them to do so.
This is not a ‘pluck a figure from the air’ kind of appraisal. Under the Property Agents and Motor Dealers Act, if you request the agent to provide a market appraisal on your home, the agent will provide a comparative market analysis (CMA) or written statement for your property.
The criterion for a CMA is comparing three properties of similar standard and style sold within a five-kilometre radius in the last six months. If an agent is not able to provide a CMA due to lack of comparable sales within your area, they must supply you with a written statement outlining how they arrived at the suggested market price of your home.
From the CMA or written statement, and taking into account the current property market, sellers will have formed a foundation from which to set a realistic selling price for the home.
In any market conditions, establishing a realistic price when selling your home is important, however, it is even more important when there are more sellers than buyers in the marketplace. After all, being an educated seller – sans rose-coloured glasses – can make the selling process much more efficient for all involved.