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What you should know to price your property for sale
How to Price your Property for Sale? As a realtor, I get this question all the time. Here are some guidelines to help you price your property competitively in today’s market.
Understand The Local Real Estate Market
How to price my property for sale: Every area is different, so it’s important to understand how local real estate professionals set prices in that particular city or town. A good way to do that is by checking out how other properties in your neighbourhood are priced when they’re sold and looking at their sale prices compared with listings of similar houses nearby. Then, look back at what comparable houses were selling for six to twelve months ago, and compare those figures with current ones. You will eventually notice patterns in pricing that indicate there has been an uptick or decrease in values since then.
Start high, but not too high. You want to get the most for your property, without pricing yourself out of the market. By starting off with a higher price than what you expect to get, you leave room for negotiation and give buyers an incentive to make offers on your home. But don’t start off too high either — setting prices that are unrealistic or out-of-touch with local values may lead prospective buyers to wonder about problems that might be lurking in the house. If it looks like nobody will pay your “list price,” you will have to lower it until somebody bites, incurring more costs in realtor fees and reduced net profits.
Trial And Error
Once you set a list price, put your home up for sale. Give it a chance to catch the attention of potential buyers, and see what kind of offers you get back. The initial sale price will be influenced by your list price; if you’d set your list price too high, buyers will know that you’re not expecting their first offer and start lower than they normally would.
The market analysis I do when pricing property includes:
– Evaluating comparable sales (recent and past) and updating them as necessary for age, size, quality etc.,
– Analysis of current listings – what is selling/has been listed recently in comparison to my subject property,
– Where does my business compete with other businesses? Am I reaching the right demographic? What are my competitors doing well or poorly?
– What are the buyer trends in our market at this time?
– What are their hot buttons – what are they looking for more of less of?
– Is my house better/worse than others I can use to make a comparison – if so why does it matter.
– Price per square foot, price compared to budgeted expenses, overall all property condition etc.
After pricing many properties over the years, I have found that making changes based on feedback from buyers is key. The newer your home, and the more special features you have, the more wiggle room you will likely have in setting list prices. For instance, buyers might offer above your bottom line if your property is pristine with great amenities such as an outdoor kitchen, pool, gym room, etc.
I told you it wasn’t much fun. The challenge is to find just the right balance between what buyers are willing to pay and your bottom line. Good luck!