When putting their property on the market, the average home seller might find it particularly difficult to settle on an asking price that would appeal to the broadest possible group of buyers. Establishing the correct price – one that is not too high (in which case a property is likely to spend far too long on the market, while also limiting the amount of potential homebuyers) or too low (in which case a proper profit might not be on the cards for the seller) – can prove notoriously tricky.
Striking the right balance when deciding what to sell for isn’t only hard to do because of the financial significance of the sale, but can also often be attributed to the fact that most sellers are not objective parties in the situation. Having lived in a house for the preceding few years means that most homeowners have a certain impression of their property, which can often be more rosy than the view of the average buyer. Homeowners frequently don’t know what homebuyers look for when inspecting a property, nor are they up to date with the latest property trends, or the price of comparable properties in their city or suburb.
In addition to the many other services rendered by qualified and experienced real estate agents, these mavericks of the property market are experts at settling on an asking price that makes the property more attractive to potential buyers, based on property trends in the city or suburb they do business in. If you need just one reason why selling with a real estate agent by your side is worth it, establishing a good asking price for the property is exactly that. As objective bystanders that understand the intricate workings of the world of real estate, agents are able to recommend an asking price, based on a number of factors.
How much is my house worth? What you paid doesn’t matter
Upon acquiring a property, homeowners may believe that the value of their home will only increase as time goes along. With this in mind, they may come up with a selling price that boils down to a simple equation: (the price they paid for the property) + (value that has been added to the property over the past x years) = selling price x years later.
However, even if property is usually referred to as a safe investment because of the potential it holds to accumulate value over time, this is not always the case – and the property market is always in flux, changing according to local and international economic trends. When a buyer’s market is at play, sellers might have to think about the possibility of sacrificing profits if they still want to sell quickly.
Similarly, sellers whose properties might have accumulated a great deal of value, thanks to favourable market conditions, stand to make more profit than they might have initially anticipated.
Again, your real estate agent is a godsend here. Agents often do business in specific areas for years, allowing them to get a good idea of how the local property market is likely to perform at a specific time.
When putting their home on the market, home sellers should discount what they paid for the property – this has precious little to do with what’s more important: what potential buyers are looking to pay at a particular moment.
Factor in upgrades
Your real estate agent will recommend home improvements and renovations, should they be necessary, in order to make the property more attractive to potential buyers. While this can initially seem like a waste of money to many buyers, beware of disregarding sound advice from a property expert.
While there are definitely upgrades that you can skip because they don’t add real value to the property, others may be essential to securing a deal or making the property stand out among comps in the same city, town or suburb.
Comparable properties certainly have a big influence on what your home is likely to fetch at any given time. Remember: potential buyers will inevitably compare your home to others on the market anyway, and this is one case in which you want to make a good and lasting impression.
Even small cosmetic touch-ups can make a world’s difference when appealing to the buyer pool, but sellers shouldn’t forget to factor these repairs and upgrades into the price they are asking for the property on the market.
Some sellers have enough cash to fund upgrades, but others will have to recover these costs once the house is ultimately sold. When your real estate agent mentions upgrades, ask them how much of the selling price these should constitute.
Leave some room to negotiate
You can bet your bottom dollar that prospective homebuyers will want to negotiate about the price you are asking for the home. When deciding how much you want to sell the property for, keep this in mind and leave some wiggling room, so you don’t later feel cheated out of profits.
With this being said, it is the better choice to rather let your real estate agent handle these negotiations on your behalf. Because they are not emotionally involved in the sale of the property, real estate agents won’t be moved to negotiate in a certain way. Allow them to do what you are paying them commission for – representing your best interests insofar as getting the best possible price for the property in the shortest amount of time.
Don’t harbour any doubts about your agent keeping your best financial interests in mind, because a low selling price will also affect the amount of commission they walk away with after the property is sold. They’re not just looking after you, but also have a vested interest in the selling price of the home – and they’ll keep this in mind when negotiating.
Price with web browsing in mind
Especially as the pandemic ravages on, the online presentation of the property is perhaps one of the most important aspects to remember when it comes to marketing the home. Most prospective buyers kick off their property search with an internet search, utilising online property directories, social media pages and other websites. If your home is not being advertised with these platforms in mind and marketed accordingly (this includes the price it is being advertised for), the property is likely to get lost in all the online noise.
Again, comparable properties in a city or suburb have a significant influence on what you should be asking and advertising the home for. If the price you are putting it on the market for is vastly different to what comps cost, don’t expect the emails to start rolling in. If your home is priced too high, buyers will notice – but if it is in line with what similar real estate is going for, while also being presented in a way that makes it attractive to potential buyers, you’re probably golden.
Test the waters with a soft rollout
Still not sure if you’ve struck the right price to see the property sell quickly, albeit with enough profit in your pocket? Ask the real estate agent helping you to sell whether it would be possible to do a so-called “soft rollout” online before your home officially goes on the market. In a case like this, a tease of the home is put online, listing it as “coming soon”. The interest this ad creates will give you a good indication of whether the home is priced in a way that draws the greatest group of prospective homebuyers.
Pricing a home correctly certainly isn’t the easiest thing to do. Keeping in mind that this is likely to be one of the most significant financial transactions you will undertake in your lifetime, establishing a price that guarantees a quick sale and a good margin of profit isn’t just the right approach – it is vital.
In this regard, finding a real estate agent that has completed their qualifications, is up to date with the latest regulations, and has been doing business in the town, city or suburb you are selling in is a crucial, yet simple way to help you get it sold at the right price, and preferably the price you have listed it for.
Various things might influence the price your home ultimately fetches. First off, forget about what you paid when you bought the property, because market conditions are not the same as they used to be, and this is even true if you acquired the home a year ago. The property market is an ever-changing sea, and without the right agent at the helm, even the most titanic of homes is likely to linger on the market for far too long.
Remember to factor in the money you spend on upgrading the home, while also leaving room for buyers to negotiate – something they are more than likely to do. Also don’t forget that buyers will see your property alongside other, similar homes in the same vicinity, and that choosing a price that is too high won’t benefit you in the online sphere.
The internet is a great tool when it comes to real estate, and online agent finders like Perfect Agent make it easier than ever top find an agent that understands your needs. To find the perfect agent for you today, click here.