How Do You Price A Home Correctly - To Sell?

Pricing, now more than anytime over the past decade, is critical to  successfully selling or renting your property. According to the experts,  accurately positioning your property’s value from the get-go, is the  best advice you’ll receive for the current market.

The reality is that ignoring market trends right now will result in  the property remaining on the market for longer and achieving a much  lower selling price after the market has rejected the initial listing  price.Cyclical and consumer-driven by nature, the property market reacts  as the balance between demand and supply shifts. This becomes  particularly important as the market becomes more favourable to buyers  and requires expert advice on pricing.

Today’s buyers across all price sectors are extremely savvy and  research the market thoroughly before committing to a purchase decision,  so it’s imperative that a property is not brought to market at an  unrealistic price. If you don’t capture the market within approximately  the first two weeks, then it’s most likely you’ve lost those prospective  buyers.

Bear in mind, buyers and particularly first-time millennial  purchasers, are watching market trends and prices achieved to ensure  they make informed, intelligent offers.They tend to have an excellent  understanding of the market as they look at stock listed by different  agencies. If a seller is asking way over market price, he/she will  either not attract the buyers to the house or will elicit anoffer way  below asking price. To ascertain if the market is dropping, the  difference between a well-considered agent valuation and the actual  price achieved for a property should be considered, and not the  difference between a seller’s wish price and the selling price – as the  wish price was not realistic.

It’s a misconception among some sellers, that a property should be  pegged at a considerably higher price than its market value, to allow  for any downward negotiation. An inflated price might result in multiple  price reductions, which ultimately could see the home sitting on the  market for much longer.

The fact is overpriced properties stay on the market for longer and  normally result in achieving a lower price than if they went to market  with a more realistic price. This is because buyers look out for price  reductions and then see this as an opportunity for a bargain, which is  detrimental to achieving the best market-related price.

Markets are by their very nature, dynamic, so in the current somewhat  slower-paced market – which is experiencing differing levels of  activity in different nodes and areas – and indeed in any market, the  seller needs to be realistic in pricing in order to attract genuine  buyers.

Set your price in the context of prices achieved for similar homes  sold in the area. Ask your agent for a comparative market analysis. Some  agents try to lock sellers into mandates by overpricing, only to be let  down when no buyers visit or a low offer comes in, “The last thing you  want is for your property to sit on the market for a lengthy period and  then become ‘stale’, as buyers know when a home is over-priced or  remaining unsold.

Buyers are astute and informed because they do their homework. They  compare properties to see what else is for sale and how the condition,  location and price compares. If it’s well-priced they will offer close  to the asking price and if the area is very much in demand a buyer may  even offer more than the asking price. Similarly, if it’s over-priced  the buyer will offer much less.

We are currently experiencing a shifting market where buyers are  starting to resist prices. With the rising cost of living, including  increasing electricity and water costs, people have less disposable  income and are generally more price-conscious. This makes it all the  more imperative that home owners who want to sell their properties  ensure these are priced correctly.

Sellers also are advised to take note of the number of properties on  the market that will be competing with their property once they go to  market. The more properties there are on the market the more your home  has to stand out from the rest and offer good value for money for  buyers. Also take note of any positive development occurring in your  area which could advantageously influence the sale of your property

Remember that other properties listed at the time will provide  alternatives to buyers viewing your property. If your property is not  competitively priced, it will be rejected by the market and point the  buyers in the direction of the other properties.

Further advice for sellers from Pam Golding Properties:

Factors which are less or not relevant when pricing your home  include: what you spent on it and how much money you need to be able to  purchase your next property.

Another factor to consider when pricing your home is that property  search portals require the user to enter a price range to narrow down  their search options. Obtain expert advice from a professional and  experienced agency operating in the area and then take the agent’s  market assessment into account when pricing you property for sale, be  flexible on viewings and allow show days, and ensure your home is always  neat and presentable. Remember that having a dedicated agent market  your home achieves much better results than having it over-exposed and  available to all. Not only is this a security risk, it can also lead to  double commission claims and buyers thinking the seller is desperate to  sell – which could lead to lower offers. Having one agent control the  listing, position the property in the market and work a strategy to  maximise the selling price is the best way to sell your property.

Presentation is critical and the home should allow the potential  buyer to feel that they could just move in. Remove all clutter, tidy up,  freshen up paint work, deal with all the overdue maintenance, check  that doors and cupboards open and close easily and replace door and  cupboard handles for a more modern look. Also bear these factors in  mind: What you paid for your home has nothing to do with its present  value. The value of the property should increase roughly by the suburb  average growth rate per annum. So if you bought it 10 years ago and  average growth for the suburb has been 4% per annum over the period,  then this is one yardstick measure of what the property should be valued  today. However, if you overspent in an area and want to sell again in a  short period of time it doesn’t matter what you paid for it, the  current market will determine the current value.

The price you would like to achieve for your home doesn’t dictate the  asking price. Again, the current market determines the value of your  property. If your property isn’t selling in the current market, it means  the market is rejecting the asking price.

The value other agents put on your property is not always accurate.  Ask the agent to substantiate their value assessment. Experienced and  professional agents will normally result in the same or a very similar  valuation. The market will determine the selling price, broadly speaking  – based on location, supply and demand. Some agents may over-value a  home just to get the mandate and then months down the line the house  sells for far less than it should, simply because it was not correctly  priced from the start. No matter what has been spent on finishes and  renovations, the home in its current state needs to be compared with  what similar homes in similar condition have been sold in the last year  or two – price adjusted for inflation.

When taking into account the prices of homes sold in your area, base  your assessment on the actual price achieved and not the listing price.  As properties for sale have not yet sold, the asking prices may be too  high.