How to price your home in a seller’s market
Don’t let your emotions cloud your judgement
In this fast paced sellers market, like the one we’re experiencing in Greater Vancouver today, it can be tough to price your home correctly and competitively. Everyone wants to sell their home for the highest amount possible while netting the most money. Though every seller feels their home is unique, most of them feel that their homes are worth more than its actual market value. As a professional in the industry I understand these feelings. Having a home you’re emotionally attached to, full of your hopes and dreams where you raised your children can sometimes drive you to set the wrong price. As an agent I can’t put a price on all the memories you have within your home, but your property and house do have a price in this market. It’s what the market dictates it to be and how much an appraiser will appraise it for. Setting the right asking price from the beginning is the key to having success in this market. You do want to net the most money possible right? Set too high? Your place could sit around, with no showings and empty open houses, which would force you to slash prices, and waste time. This will let others know that your place in fact is not worth that much on the market. Set it too low? You can say bye bye to that extra money that could’ve been in your pocket.
So how do you price your place correctly for this market?
First impressions can go a long way, you want the first impression for a buyer to be a positive one. Some sellers like to test the market with a high price, what they don’t realize is that this usually has a negative effect on buyers and realtors alike. Think of it from a buyer’s perspective, if a house has been on the market for 30-45 days in this market and hasn’t sold. They might wonder if there’s something wrong with it? giving them a negative impression, as well as the upper hand in assuming they can receive a discount or deal. So selling quicker will almost always net you more money. In this seller’s market there are a lot more buyers than there are sellers and inventory. Pricing your home for market value or just under will create a huge buzz, interest rates are low and there’s an abundance of buyers, so pricing your home properly is more important than ever. Pricing it properly can create a bidding war, when this happens it becomes more of a starting bid price between buyers, instead of just an asking price. Ask yourself, if you get one offer or multiple offers which one do you think will net you more money? If you list your place at market value and get 5 offers, I’m sure a couple of those buyers would be willing to pay more. If there’s such a high demand for your place an appraiser could also justify appraising it higher too. So you not only will you net more money, but you’ll have the option of picking from the different offers, some will have better terms than others, which gives you more power in your negotiations.
Ask your agent to sit down with you and do a comparative market analysis so you understand what you should price your place for. If there are multiple places, priced for a lot less than the your listing price, how could a realtor even justify showing the place to a buyer of theirs? When they search for properties on the MLS, if they are searching between $465,000-$495,000 but you were priced just above, then they might never even see it as an option. Consider rounding down abit just to fit into the searching range of more buyers. If there are homes alike yours priced for less, which one do you think a buyer would put an offer on first? I mean would you buy an apple for $2 if you could get the same apples down the street for $1.50? Of course not! So why would you pay more for a home that you could get down the street for a better price? The market is what the current buyers are willing to pay, so just keep that in mind.
If you are priced at fair market value or even a little on the low side you can be sure that there will be a lot of action on your place. Lots of visits from buyers and realtors and hopefully a door crashing open house. There was even one place that sold over 1 million over asking in Vancouver this year!
Do your research!
This market has been moving swiftly so using comparables for just solds has been getting tougher. You want to look at what differences there are between properties to really get an idea of what your home is worth. Even spend some time looking at the open houses of the other homes that are comparable to get a good idea of what yours is worth. Ask if there’s been any offers, or if they’ve gotten much attention on the property. Comparing to people’s listed prices can be inaccurate, because your neighbours may be less motivated to sell or are just testing the market. So it’s a good thing to keep in mind when looking at those.
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