Serious buyers look in the price range that has been predetermined by their down payment and monthly payment ability. Unless your property is priced correctly, the down payment and monthly payment requirements will not be competitive.
Buyers soon becomes very knowledgeable in their range. An unreasonable asking price only discourages them from looking at and considering your property.
Buyers purchase by comparison and a property priced above the competition does not "compare" favourably. Inviting a buyer to make an offer could indicate that a fair price has not been established.
If you plan to adjust your price at the time of a sale, it is better to adjust the price now and attract serious buyers. This often places you in the advantageous position of having more than one buyer interested in your property.
It is very difficult to obtain a reasonable offer on an overpriced property. The buyer feels they should be just as unreasonable in their offer as the seller in his or her asking price.
By contrast, offers are much easier to obtain on a reasonably priced property. You can then choose which offer to accept with no obligation to accept one that does not meet your requirements.
It is a mistake to believe that you will get more for a property by asking more. You usually get less because fewer buyers will consider it when it is placed on the market. The right buyers will not see it and it usually stays on the market so long that it becomes "shop worn."
To obtain proper market exposure, it is an absolute necessity to be competitive in price, terms and condition with similar properties that are selling in the area.
If you are a committed seller, price your property at market and attract serious buyers. You will stand a much better chance of getting full-market value and your property will sell much faster.
- 1.A REALTOR® has no control over the market, only the marketing plan.
- 2.Never select a REALTOR® based solely on the price they suggest your home is worth. They may tell you what you want to hear, hoping to get your listing, but end up pricing you out of the market.
- 3.Pricing in rising and falling markets:
a.overpricing in a rising market may be okay; but
b.overpricing in a falling market is disastrous.
Market trend is as important as pricing. Make sure your REALTOR® understands market trends.
- 4.Four kinds of numbers are used to represent your property:
- a.cost: what was paid, plus capital improvements
- b.price: what the seller wants
- c.value: what a buyer is willing to pay
- d.market value: what a willing buyer and seller will agree upon
- 5.Regression and progression:
- a.regression: the phenomenon of an expensive house decreasing in
- value because of the lesser desirable homes around it.
- b.progression: the phenomenon of a home selling for more than its
- worth because of more expensive property or a more desirable area around it.
- 6.Substitution: the value of an amenity is based upon what it will produce not what it will cost.
- 7.Reasons for overpricing:
- a.overimprovement: a seller cannot select an overimprovement, add to their lifestyle, enjoy it and expect the buyer to pay the original cost of it.
- b.need: the need for money does not increase the value!
- c.buying in a higher priced area does not increase the value of your property.
- d.an original purchase price that was too high does not increase the value.
- e.lacking factual comparable properties does not increase the value.
- f.providing bargaining room does not increase the value.
- g.the high cost of a move does not increase value.
- h.an impending corporate buyout does not increase value.
- 8.The biggest impression and most impact a property makes on the market upon buyers and upon REALTORS® is in the first few weeks of the listing. Therefore, it should show the best and be priced the best during those weeks.
- 9.Make sure you choose to work with a REALTOR® who understand the philosophy of buying up in a down market.
- 10.Benefits to proper pricing:
- a.faster sale, which will save carrying costs
- b.fewer inconveniences
- c.exposure to more prospects and therefore more offers
- d.increased co-operative REALTOR® response and promotion
- e.better response from advertising the features and benefits of the
- f.attracts higher offers, which….
- g.means more money to sellers
These pricing strategies were prepared for you because they are sometimes a roadblock between you and your goals. My job is to identify these potential pitfalls and help eliminate them.
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