Setting a listing price for your home is probably one of the hardest things to get right when it comes to the business of real estate. Homeowners who have decided to sell their house without the help of an agent have a particularly rough time coming up with a price, but even with the advice of an agent setting a price can be a hard decision because home sellers sometimes don’t want to take the recommendation of the agent on what their home is worth.
Because we live on a small island and there is a tendency for word to spread faster than a bush fire, if you want to find out how much a property was sold for you could probably get a fair idea even without the presence of a sophisticated database on real estate transactions. Unfortunately this makes everyone an expert and further bolsters the home seller’s belief that they have a great understanding of the price they can fetch for their home.
Home buyers and home sellers inherently sit on opposite sides of the fence when it comes to price. A home buyer wants to get a bargain, but a home seller naturally wants to make sure they are not giving the house away. As a home seller, you must be able to come up with a price that is palatable to the home buyer that is looking for value, while satisfying your own fears of getting what you deserve for your property. This requires that home owners take the emotion out of the selling process and consider only the following factors.
Understand the Factors that Contribute to Price
There are a few specific things that contribute to the price of real estate. They are; location, condition and the state of the market. Location cannot be changed and so this factor is easy to argue. The condition of the home can be improved to affect the price or the price can be taken down to allow buyers to make their own changes but either way it affects the final price. Market condition refers to if it is a buyer’s market or a seller’s market and this has to do with demand and supply. Simply put, if there is a lot to choose from buyers have the upper hand and sellers must account for this in their price, while the situation is reversed in the opposite position.
Take into Consideration Recent Comparable Sales
While AREA and its members have access to an official database of comparable sales, the size of the market makes it fairly easy to get information on what a property was sold for in your neighbourhood. This information gives a good indication of the general price bracket your property should fall within to be in-keeping with the market trends.
Talk to an Appraiser or Realtor
Finally, if you really want to minimize the time your home spends on the market and you want to get the price right the first time, you should talk to a realtor or appraiser. Although the realtor may be better in this case as the appraiser may be able to give you an idea of replacement value a good realtor will understand the pulse of the market and advise you accordingly.
Notice that whether or not the price can cover your outstanding balance on the mortgage or if it would allow you to place a down payment on another property has never entered the equation. Home buyers are not interested in your financial situation. They are not willing to pay a premium for a house that does not warrant it and at the end of the day the market, not your opinion or your financial situation, will dictate how much you can realize on the sale of your property.