Setting the asking price for your home is one of the most important decisions you will make in the home selling process. Like the stock market, the real estate market and property values fluctuate and are impacted by broader economic factors. As a result, your home value will change, and the extent to which it changes is influenced as much by broader issues, as it is local and neighbourhood factors.
Your home is one of your largest investments which makes having its value assessed on a regular basis a good idea.
When setting the price we need to see what the market has been paying for similar homes in your area over the last few months, and what the competition is priced at. By looking at recent sales and reviewing the competition, we can establish the market value of your home.
It’s important to set the price correctly from the outset. The first few weeks of your home becoming available for sale are the most important. During this time, buyers who have actively been looking will become aware that your property is for sale. Because these are active home shoppers they will have likely seen the competition in your area, and will make direct comparisons to your home and any others for sale. They will also have access to recent sales in the area, and as a result will evaluate your asking price in relation to the “market value” of similar homes for sale and those that have sold.
If you price your house too high, potential buyers may pass it over, or assume that you wouldn’t be willing to negotiate down to a price that would be acceptable to both you and them. Rather than potentially offending a seller or embarrassing themselves, many people who would otherwise be willing to buy your house at a reasonable price, will pass on the opportunity.
If you have to start dropping the price to sell, buyers start to think that something is wrong with the house because it didn’t sell, or assume that you’re under pressure to sell and try to negotiate a much lower price than had the home been priced correctly in the first place.
If you price your home to low, it will likely sell very quickly, however you end up leaving money on the table and not maximizing your return.