When buyers won’t buy listed real estate or even put an offer close to the asking price, there’s just one reason why – it’s the list price! Recently, Squamish home sellers have been pushing the envelope by pricing their houses over fair market value. Now these homes are sitting unsold on the market indefinitely, requiring price drop after price drop. This is not a good position from which to negotiate with a potential buyer, because you are no longer coming from a place of strength. Statistically speaking, homes that drop their price will sell for less than fair market value, whereas homes that begin by being priced at fair market value will generally invite asking-price offers, or multiple offers.
Will Rogers, U.S. humorist and showman, once said, “In a real estate man’s eye, the most expensive part of the city is where he has a house to sell.” While this is an old 1930’s quote, thoughts on pricing your own home has, by and large, not changed one bit. Most sellers still have the “my home is my castle” mentality and wish to price it accordingly. Being objective about the actual worth or the home’s condition is extremely hard for most to face.
What follows here are five tips on pricing and listing your home with realism in mind:
- Homebuyers are increasingly relying less on newspapers and open houses and more on online resources. An online search can help a potential homebuyer get a sense for what is out there, and more importantly, narrow the list of potential homes to purchase. It is online where buyers will be able to compare your home to others in the same neighbourhood. If your home presents like a rusted penny in a sea of silver dollars as compared to all the others homes in the same price range and locality, it could very well be that your price needs an adjustment, downwards.
- Interest rates and taxation can change quickly as has been experienced in 2017. It is good to keep in mind that the current real estate market is the one that buyers are shopping in. So, if your home is in a Sellers’ Market, it may well be that your home will fetch a dreamy end price. However, if the market has slowed and is now a Balanced or Buyers’ Market, the listing price needs to reflect the changing time and perhaps be reset at a more realistic price. Given the recent changes in interest rates, we have yet to see if 2018 will be a more balanced real estate market in Squamish. Pricing conservatively will rarely backfire, but can ensure you aren’t turning people away. In the end, if your price appears fair it can induce multiple offers. So, it is wiser to price lower than higher as not to turn away potential buyers and have to lower the price later. Price drops should be avoided as much as possible, it is a bad signal to potential buyers.
- Improvement costs do not necessarily increase the house value by an equal amount For example, a seller who recentlypaid thousands to modernize windows and replace the roof expected the listed price to reflect his out-of-pocket expenses. This did not happen. Done correctly, modernizations and/or improvements can boost the desirability of your home and therefore, value, but don’t expect the buyers to pay for all of them. They may view these improvements quite differently than you. Major renovations are best undertaken to enjoy by the existing homeowner, not as a means to sell a home. At most, cosmetic updates are your best bet when selling.
- Most buyers will look at your home and see the land, bricks and mortar. Although they may be looking for their dream home, they do not have a seller’s personal attachment and pride of ownership. So, in the end analysis, what a buyer is prepared to offer on your property may not be what you expect. You are selling a “home” and they are buying a “house.”
- Sellers should consider staging their home or adding 5-star hotel swank. Homes will often sell for more and in less time than their counterparts because the online pictures will look like a cover spread in a home magazine. The emotional appeal will often seal the deal.
In the end analysis, it is important to remember that the right price will attract showings which will generate offers and we all know that the more offers, the better!
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