PRICING YOUR HOME FOR SALE IN OUR CURRENT MARKET
The "CORRECT PRICE" is the single most important consideration when selling your home. Determining the Absolute Right List Price based on how much your house is worth in today's market if you want to sell it for Top Dollar.
THE CHALLENGE
You don't want to overprice your house because you're going to lose the freshness of the home's appeal after the first two to three weeks of showings. Demand and interest wane after 25 days or so. Of course, there's nothing stopping you from dropping your price later, but this can be a matter of too-little-too-late.
On the other hand, you do not need to worry about pricing it too low because homes priced below market value will often receive multiple offers. This often drives the price up to a higher current fair market value. Pricing is all about supply and demand. It's part art and part science.
No two agents price property the same way. Some agents are much better at analyzing and knowing the local market to be able to price your home Right from the outset than others. I undertake the following steps to ensure we as a team get the Price Right! However, Ultimately the choice of Price is Your Decision. Here is the process I use to create Your Current Market Analysis - CMA
PULL COMPARABLE LISTINGS AND SALES
I carefully review and compare every similar home that's been listed in the same neighbourhood as your property over the last three months. The list should be typically limited to homes within a 1 km radius unless it is rural property. Then within a 5-10 km radius is used.
I pay close attention to neighborhood dividing lines and physical barriers such as major streets, freeways, or railroads. Never compare inventory from the "other side of the tracks." Identical homes directly across the street from each other can vary by as much as $100,000 in some neighborhoods. Perceptions and desirability have REAL value to what a buyer will spend. Understanding both the Buyer and Seller motivational desires in the current market is essential to Pricing Right!
I also compare similar square footage within a 10 percent variance up or down if possible. Comparables need always to be of similar age and home style. It is necessary to Be COMPARING Apples to Apples.
SOLD COMPARABLES
Then I compare original list prices to final sales prices to determine price reductions. Compare the final list prices to the actual sold prices to determine ratios. It's common for homes to sell for more than 100 percent of list price in a seller's market. Homes generally sell for list price or less in a buyer's or market. Adjustments pricing need to be made for lot size variances, configuration, amenities Not every upgrade reflects a positive market value increase. Buyers expect upgrades to aid and enhance the design and flow throughout to add to the increased market value.
SUSPENDED, TERMINATED AND EXPIRED LISTINGS
The history for any expired, suspended and withdrawn listings that have been taken off the market and/or relisted. If so, add those days on market back to these listing time periods to arrive at an actual number of days on market.
We need to determine patterns as to why these homes did not sell and note any common factors they might share. Which brokerage had the listing? Was it a company that ordinarily sells everything it lists or was it a discount brokerage that might not have spent sufficient time and used effective marketing strategies to ensure the homes sale? I outline the steps necessary for you to consider to ensure you can prevent your home from becoming an expired listing based on this information.
Again, make note of the days on market. This can have a direct bearing on how long it will take before you see an offer. The history of these listing can provide valuable market value knowledge to prevent unnecessary price reductions and lost price value.
ACTIVE LISTINGS
I love to tour these homes with my sellers so they "See What The Buyers Sees" vs what "They Want or Are Use To Seeing". I suggest Making Notes of what they like and dislike and the general feeling they got upon entering the homes. Then we Recreate the positive feelings of reception in their own home if possible. These properties are the competition. The Magic Question - Why would a Buyer prefer your home over any of these others and adjust your price accordingly.
MARKET DEPENDENT PRICING
The next step is to analyze all of this data based on current market conditions. For comparison purposes, let's say that the last three comparable sales in your neighbourhood were $750,000.
Your sales price might allow some wiggle room for negotiation in a buyer's market, but you'll want to be strong enough and close enough to the last comparable sale to entice a buyer to tour your home. You might need to price your home at $749,900 and settle for $745,000 to sell in this market.
You might want to add 10 percent more to the last comparable sale in a seller's market. You can ask more than the last comparable sale and you'll likely get it if there are little inventory and many buyers. That $750,000 home might sell for $765,000 or more.
In a balanced or neutral market, you might want to initially set your price at the last comparable sale then adjust it for the market trend. If the last sale closed three months ago but the median price has edged upward of 1 percent per month since then, pricing at $754,500 would make sense. Your Home
is one of your largest asset the sell of it means making the Right Listing Price to ensure your success!