How to set the right asking price for your home
A lot of people think you need to use a Real Estate Agent to determine how much you should ask when you put your home up for sale, but in reality, if you ask 3 different Agents, you will probably get 3 different asking prices. Which is the right one? There is no exact science for determining what your asking price should be, but there are a few steps you can follow to price your home properly.
1. Take a look around
There really aren’t any secrets when it comes to home prices. All of the prices are on display for all to see. All you need to do is take a look for yourself.
The first thing you should do when you start the process of pricing your property, is to take a look around at what you will be competing against. Take a drive around your neighbourhood or community, write down the addresses of properties that are for sale, and go online to see how much they are asking, and to see how those properties compare to yours.
If you are in a Condo, check to see if any other Condos are for sale in your complex. How does your asking price compare to the other Condos for sale. Make sure yours is priced competitively, and if possible, for less money than what you are competing against.
2. Put yourself in the buyer’s shoes
How much would you be willing to pay if you were looking to buy your own home today? That’s one of the first questions I like to ask people who are trying to set an asking price for their homes.
One of the biggest mistakes sellers can make is asking more than they actually expect to get for their home sale. Sometimes sellers think they will ask more than they expect to get, because it will give them more room to negotiate, and that buyers will make them an offer the buyer thinks is reasonable, no matter what the asking price is.
But buyers are also doing their research, and if they think a home is over-priced, they are far more likely to look somewhere else, rather than make an offer significantly less than the asking price, even if they like the home.
3. Set your best price
Once you’ve done your research, and you know what you are competing against, set your best price. Set a price that competes well with other homes for sale in your neighbourhood. If the price is attractive to buyers, you are more likely to get more than one buyer interested, and maybe even end up with a bidding war, and selling it for more than you were asking.
If your asking price is unattractive to buyers, you are unlikely to attract any buyers at all.
4. Time is of the essence
Setting an asking price that is too high hardly ever results in a quick sale. Usually what happens when Sellers set unrealistic asking prices, is that Buyers don’t respond. The Sellers become frustrated by the lack of interest in their properties. After a few weeks, they will often lower their price, but by then, a lot of Buyers have moved on, and the initial burst of exposure for the property when it was first posted, has diminished.
At that point, because they haven’t had a great response to their private sale, Sellers are ripe for the picking for Real Estate Agents, who try to convince them to list the property with them. Often the first thing that happens if they do that, is that the asking price is lowered even further.
So the Seller is now facing a much lower asking price than they started with, and are also faced with paying a Real Estate Commission if they do sell. And still no guarantee that the property will sell.
So if you are thinking about selling your home privately, do your research, put yourself in the buyer’s shoes, set your best price, and prepare to deal with buyers!