I am often asked to “appraise” a property. Usually I recommend a price range and then “fine tune” a strategy for pricing. If I hear the words “I need,” “it will only work if,” and “we can always reduce later” the seller is probably not motivated, therefore they are not ready to hear and react to the truth. It is “crucial” to list at the right price — but how do we arrive at the “right price.”
Markets change everyday but to actually arrive at a “correct” figure, there are a number of things I take into account. For example, the street or the building; recent sales; lot size; sq. footage; location on the street; view; location in building; and condition of property — immaculate vs .cluttered, original condition vs renovated. Other factors influence price, such as proximity to traffic, trains, fire stations, cemeteries, and schools.
The Result Of Overpricing
Many sellers believe that if they price their home high initially, they can lower it later. Often when a home is priced too high, it experiences little activity. Gradually, the price will come down to market value, but by that time it’s been for sale too long and some buyers will be wary and reject the property.
On occasion, the price is dropped below market value because the seller runs out of time. The property sells for less than it’s worth.
Missing the Right Buyer
You may think that interested buyers “can always make an offer,” but if the home is over-priced, potential buyers looking in a lower price range will never see it.
Those who can afford a home at your asking price will soon recognize that they can get better value elsewhere. You help other listings sell! As soon as a home comes on the market, there is a flurry of activity surrounding it.
This is the critical time when Realtors and potential buyers sit up and take notice. Showings will be booked right away if the listing looks interesting and seems priced appropriately.
If the home is overpriced, it doesn’t take long for the potential buyers to lose interest. By the time the price is reduced, a majority of buyers are lost. Listen to an experienced real estate professional and success should follow!
Elli Davis has been awarded the #1 position in Toronto for Royal LePage (approximately 13,000 agents nationwide) for the 22nd consecutive year and the #5 position in Canada for Royal LePage. Read her weekly blog at PostCity.com. For more information on Elli Davis click HERE.
