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Selling Your Home: How to Avoid Overpricing

By The A-Team | Nov 06, 2017 | Seller Advice

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When it comes to home selling, pricing your house right will determine how many offers are made for your home. Some sellers, particularly first-timers, don't see much trouble with pricing high. However, overpricing a home can be the sole reason why it doesn't sell, especially in a buyer's market. So how do you price your home right? Here are few tips to help you decide:

Before even listing your home, it's important to study your competition. Sales of similar homes give you a good idea of the prices a market is tolerating. These comparable homes have to share a number of characteristics with yours, including age and size:

Study the Comparables

Shop your competition. Whether you are using an agent or not, learn the offering and selling prices of similar properties. Find out how long each took to sell.

To be comparable, a house that sold has to be close to yours in age, style, size, condition and location. When looking at closed sales, try to find at least three comparables no more than six months old (three months if market vales have been rising or falling more rapidly than usual). You can do some of this research yourself on local agents' Web sites. If you are listing your home with an agent, this kind of market research should be prepared and presented to you. Agents can also find out what concessions, other than price, sellers of comparable homes gave their buyers. For example, did they agree to pay discount points to reduce the buyer's mortgage interest rate or throw in $10,000 of repairs? Via kiplinger.com

So, shop your competition and get ahead so you can sell your home faster than expected.

Study your competition!

While looking at past sales in your neighbourhood, it's also a good idea to spot trends as they're appearing. If you know what the future holds for an area, you can tell if a high price is justified. Factors like government, unemployment, and future developments (such as shopping centres) all impact property value:

Trends in the market

While elements such as government policy, access to finance and unemployment will impact the property market throughout the country, there are specific influences that impact micro-markets in particular areas.These include new companies moving into the area or plans for improving local amenities such as parks or shopping malls. When setting a listing price, estate agents will look at all the unique elements and consider how they influence the perceived value of the property. Both the wider general influences and localised factors will affect the home’s perceived value among buyers. h/t onthemarket.com
This is applicable to areas like the north of Fort McMurray, where ambitious new projects are in the works in Eagle Ridge and Parsons Creek. As local amenities improve, the value of these neighbourhoods provide to owners/buyers, improves.

This last tip can be helpful to hurried home sellers. In order to sell your home faster, pricing your home a bit lower can be the solution, according to Brendon DeSimone, REALTOR® writing for Reader's Digest:

Appeal to the “herd mentality”

Given the high stakes of real estate, a buyer doesn’t want to be the only one interested in a house. By pricing your property on the lower end of the value range, you could stimulate interest among more than one buyer and create a herd mentality. Also, if you’re under the gun to sell quickly, this would be a good option. Read more at rd.com
The concept seems counterintuitive, but it holds weight: a lower price will certainly lead to more buyers, which can lead to a bidding war on your home.

In our current market, pricing competitively is key, because, otherwise, listings don't get much attention. However, price isn't the only factor. An ideal listing gets the maximum amount of eyes on the home, something The A-Team is reputed for. If you're looking to sell your home, look no further for world-class marketing.

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