UNDERSTANDING MARKET VALUE
Market-sensitive pricing is the key to maximum market exposure and, ultimately, a satisfactory sale.
The existing pool of prospective buyers determines a property’s value, based on:
- Location, design, amenities and condition
- Availability of comparable (competing) properties
- Economic conditions that affect real property transactions
Factors that have little or no influence on the market value of a house include:
- The price the seller originally paid for the property
- The seller’s expected net proceeds
- The amount spent on improvements
The impact of accurate pricing:
Properties priced within market range generate more inspections and offers, and sell in a shorter time period. Properties priced too high have a difficult time selling.
PRICING YOUR HOME
An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price.
A Comparative Market Analysis considers similar properties that:
- Have sold in the recent past – This comparison process shows us what buyers in this market have actually paid for properties similar to yours.
- Are currently on the market – These are properties that will be competing with yours for the attention of available buyers.
- Failed to sell – Understanding why these properties did not sell can help avoid disappointment in the marketing of your property.
DANGERS OF OVERPRICING
- An asking price that is beyond market range can adversely affect the marketing of a property.
- Fewer buyers are attracted, and fewer offers received.
- Marketing time is prolonged, and initial marketing momentum is lost.
- The property attracts “lookers” and helps competing houses look better by comparison.
- If a property does sell above true value, it may not appraise and the buyers may not be able to secure a loan.
- The property may eventually sell below market value.
COMMON SELLING MISTAKES
The selling and buying of a house can be a stressful and confusing process. Not only is it very expensive to ‘learn from your mistakes’, but very few people move often enough to gain the needed experience.
Although there is no substitute for doing your homework (start by asking your family and friends who have recently moved for their experiences) the following list of common pitfalls may be helpful.
Pricing Incorrectly (too high or too low):
Make sure you determine the market value of your home correctly: if your asking price is significantly higher than what the market is currently bearing, many potential buyers looking for your style of home will view similar but lower priced homes first. Not only does this limit the pool of potential buyers but it also increases the chances that your home will sell for less than its actual value. This is due to the “discount” often associated with properties that have been on the market for a longer than average time. Buyers are often overheard asking their Agent. . . “What’s wrong with that home? It’s been for sale forever”.
Failing to “Showcase” your home:
A little work can improve the first impression of your home a thousand-fold. First impressions are lasting impressions and can dramatically affect a property’s perceived value.
Mistaking a Bank’s appraisal or a new Tax Assessment as your home’s actual market value:
These processes are based on general guidelines such as lot size and square footage, not specific qualities and improvements of your home. Using either of these as a baseline could cause you to over- or under- price your property. It requires detailed background knowledge of all recent neighbourhood sales as well as homes currently for sale in order to estimate value accurately. Ask your Realtor for a detailed market evaluation.
Choosing the wrong Agency or choosing an Agent for the wrong reasons:
It is critical that you have full confidence in your Agent’s experience and abilities. You want an Agent who can explain the whole selling process to you, has a good feel for the market, has access to potential buyers and offers sound advice on how to improve your chances of selling. Absolutely avoid choosing an Agent on the basis of which one gives the highest estimate of your home’s value. In order to achieve the best sale price within a reasonable period of time, you need an accurate indication of the true market value of your property. Knowing this information allows you to properly price your home, thus maximizing your chances of selling and allowing you to make your future plans with the sure knowledge that your goals can be attained
Failing to take current market conditions/trends into account:
Is it a Buyer’s market, a Seller’s market, a balanced market? What do future trends look like? Ask your Realtor for a full analysis.
Not taking advantage of market fluctuations: The Big Picture. . .
Moving up in market downturn? If your $300,000 home has dropped 10% in value, so has your $600,000 dream home. Yes you lose $30,000 on your current home, but save $60,000 on your next purchase! Always keep in mind the big picture.
AND STILL MORE!!!!!
Using “Hard Sell” during showings:
No one likes being pressured. As well, buyers might wonder why you are so anxious to sell. Let your home speak for itself.
Mistaking “Lookers” for “Buyers”:
Many people who look at homes for sale may just be getting a feel for the market, seeing how others ‘showcase’ their homes, or even just looking for decorating ideas. Your Agent deals with these situations on a full-time basis and has the experience needed to separate the “Lookers” from the “Buyers”.
Limiting the marketing and exposure of your property:
Part of what a good Agent does is to ensure that your property is showcased and marketed in the best and most productive manner possible. Not allowing a “For Sale” sign on the front yard or limiting viewing times can dramatically reduce the number of prospective purchasers seeing your home and have a serious impact on your bottom line.
Help us, help you! By responding to the following information we will be able to better assist you in your upcoming property sale.
What form of communication would you prefer for ongoing feedback?
Email / Fax / Mail / Telephone
What do you like most about your home?
What do you like most about your neighbourhood?
What improvements have you made to your home? (Please include dates and costs.)
Any environmentally friendly (Green) changes that have been made?
What is the age of the following (in years)?
Hot Water Tank Windows
Air Conditioner Electrical
What is the type of heating?
Average cost $ ____________/month
Average H2O $ _____________/month
PREPARING YOUR PROPERTY
With buyers, first impressions count. A small investment in time and money will give your home an edge over other listings in the area when the time comes to show it to a prospective buyer. Here are some suggestions that will help you get top market value:
Oil squeaky doors Tighten doorknobs
Replace burned out light bulbs Clean and repair windows
Touch-up chipped paint Repair cracked plaster
Repair leaking taps and toilets Repair edges around tubs, sinks or splash-backs
Cut lawns Trim shrubs and plants
Weed and edge gardens Pick-up any litter
Clean paths and driveway Repair gutters and eaves
Touch-up exterior paint Ensure mail, newspaper is brought in daily
THE SPACIOUS LOOK
Clean stairs and halls Store excess furniture
Clean counters and cabinets Make closets neat and tidy
SPIC AND SPAN
Shampoo carpet Clean washer, dryer and tubs
Clean fridge and stove Clean heater/cooler and ducts
Clean and freshen bathrooms
THE BUYING ATMOSPHERE
Be absent during inspections Turn all lights on including lamps
Light fireplace Open drapes during the day
Play quiet background music Keep pets outdoors or away during inspections
Clean and tidy entrance Have a Functional doorbell
Polish door hardware
SALE PRICE __________________________
MORTGAGE BALANCE __________________________
MORGAGE DISCHARGE __________________________
LEGAL SERVICES __________________________