Pricing Your Home
The task of pricing your home is not easy. It is delicate and requires some finesse, experience, a touch of knowledge, and all paired with solid research into the area. Add to that a “gut feeling” which is more often right about the best pricing model for your home.
After all, it has to:
- Attract the right buyers
- Sell quickly to avoid stagnation
- Earn you as much money as possible
No easy feat.
Price is, by a massive measure, the most important part of the homebuyer’s factoring process. They base everything on that figure, making it crucially important to get it right. Price is NOT the same as value. YOU set the price of your house, but it’s the market that determines the value of your home. It has to be an objective price, a hard fact when you think that you are selling the most important part of your life.
The Power of Correct Pricing
Here are the main benefits to better pricing.
- Increased exposure to the RIGHT, QUALIFIED buyers
- Less hassle with a faster sale
- Faster real estate agent response times
- More advertising and better responses to it
- Earns you more money
- Avoids market stagnation
Buyers will pay close attention to how your home is priced against others in your neighbourhood. Look to your neighbours to get a better sense of what people will be expecting when they see your home.
Reasons For Overpricing Your Home
Avoid the temptation to price too high because the biggest sale-killers are the homes with inflated sale prices. Why do this? A variety of reasons:
- The home was purchased in a higher market
- Over-improvement of the home
- Too much need for cash
- Lack of concrete data
- Too much bargaining room
- Unnecessary sale
- Involvement of emotions
- Incorrect Assessment
This is a delicate balance, but high pricing can majorly affect your home’s sale perceptions. In our experience, this is what it looks like:
- A high likelihood is that all the activity on your home will occur when it is first listed, followed by a steep drop off. Proper pricing creates an urgency to act that motivates buyers and agents to make offers.
- Buyers know what they want, which is why more time on the market won’t matter. Quick sales occur because the buyer has found the right house which has just come on the market. It’s the buyers who wait for the right house, not the house waiting for the right buyer.
- The temptation to start high with the freedom to drop it loses the interest in your place. By the time your price is lowered to your “actual” price, the interest of buyers has moved on, assuming something is wrong with the home.
- The old adage says that it’s better to not be the most expensive house in the neighbourhood. Even if you’re priced “correctly” the comparable sales of the other homes do nothing but make your price seem inflated and unreasonable for the area.
- High prices attract the wrong buyers, who won’t bid on your house or generate any interest.
- Your high price actually pushes buyers to buy similar homes to you for lower prices. You are, in a sense, pushing the buyers to your competition on the market.
- The longer sale times cost you money with marketing costs, mortgage payments, and maintenance bills.
Using An Experienced Agent for Pricing
There is really no exact price for your home. Everything is highly subjective on many factors, a lot of them outside of your control. But a professional Calgary real estate agent will work hard to create the right price for your place.
They will provide you with a comparative market analysis, the recent homes that have sold in your area. This will inform your decision about the price range for what you’re selling. This analysis takes into consideration the location, style, and amenities that your home has in comparison with many homes around you. Using that CMA, the agent can tell you the expected price, not what they think the home is “worth” Remember that value is determined by the market, not by the agent. It’s our job to determine the price to help skew the value of the home.
But the price IS in our control. We can base that price off of the time that we go to market, the financing options provided, the condition of the house, and the exposure that we give the property. We can also include incentives to purchase and use the current trends to list at a price that will create demand for your home.
Let the team at The Chamberlain Group discuss pricing your home in Calgary today.