How to Price Your Home Correctly?
The housing market has quickly changed over the last month. We have gone from a frenzied Sellers’ market to, well, we are not quite sure yet. Inventory is increasing. Interest rates have increased. We are seeing fewer multiple offers. It looks like we may be moving into a Buyer’s market. What does that mean for Sellers? It means that it is imperative to price your home correctly.
Scenario #1
Your property is priced too high. You think your home is worth $X. You have your reasons. Remember, your reasons are subjective. Many sellers think their home is worth more than their neighbours. (See the chart below. ) The goal is to get as many eyes on the property as possible. Most property views happen within the first two weeks. By overpricing your home, you negate several potential buyers. If your property sits on the market, you risk your property becoming stale and stigmatized. The longer a property sits, the less likely it will sell at your listed price. Overpricing your home is one of the hardest things to recover from and may actually end up costing you more than had you priced it correctly. Selling our property based on hope is not a strategy.
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Scenario # 2
You price your home artificially low in the hopes of getting multiple offers and a bidding war. This strategy can work when it is a seller's market and inventory is low. We have seen this over the past two years. However, as interest rates rise and inventory rises, this will not be your best strategy. It is more important than ever to have your property priced correctly and competitively.
Scenario # 3
You price your property according to market conditions and based on proper comparables.
What is a CMA?
A CMA is a Comparative Market Analysis. That is an estimate of a property’s market value based on sold, similar properties in the immediate area. The best CMA is one based on apples-to-apples; properties that have recently sold and that are similar to the subject property in size, style and location. A CMA also considers the neighbourhood and the community as well as the unique qualities of the subject property. Remember comparable sales data never lies.
Comparables give you real-world data. A CMA is important for sellers and buyers. For sellers, choosing the best listing price for their homes is imperative to get the most profit from the sale. The best price is one that is not so low as to leave money on the table, but not so high as to deter buyers. For buyers, a CMA helps them determine if the asking price is in line with the value of the property.
What qualities do I need in my Realtor?
Look for an agent that is not afraid to tell you the truth. The truth may be that the price you want for your property is not in line with the market.
There is a lot of information to process when pricing your property. Pricing your home is about having a conversation. You want an agent who can back up what they think with a CMA and an agent who can explain it.
An organized agent is a ready agent. Look for an agent who has an organized presentation and system for pricing your home and getting the job done.
If you have any questions about pricing your home or are just curious about where you stand in the market, we are here to answer any questions you may have.