Ever wonder why and how an agent prices your home? Usually an experienced realtor knows how to properly price your home to be competitive on the market. There is a lot of work that goes into calculating the price and sometimes a sensitive topic to broach with home owners.
If you've interviewed a few agents and are ready to commit, but have been presented with a few different prices. Obviously over pricing will mean more money in your pocket, and under pricing your home will create a faster sale.... SO how do you make the decision that sets the tone of your home sales experience? That's where your experienced agent will have some great insight.
Placing value on a property comes from years of experience.
Here are some mistakes that can be made when evaluating your home:
- Using far too simplistic evaluation methods like calculating price per square foot rather than comparing finishing's, and surrounding neighbors.
- Sometimes nerves can get involved in listing presentations, the agent could be telling the owner “what they want to hear.” instead of what the market is showing them.
- We all want and believe our home is better than the next guys. Because the neighbor’s house sold for a certain amount, that their house should too. (Never mind that the other house was fully renovated, in better condition.) A reputable agent will tell it to the seller like it is and deal with the consequences – like missing out on the listing.
The Essentials that We consider when pricing a home include:
- As Agents, we have full access final selling prices from listings services on MLS. Some data isn’t available to the general public because of privacy laws.
- How home selling prices are trending in Edmonton and in your specific neighborhood, based on sales over a 12 month period of time.
- A review of the final selling prices for comparable homes in your neighborhood. There’s no point in comparing your 2,000 square foot bungalow to the 2,7000 square foot two-storey down the street. As well, take into consideration of:
- Builder quality
- Square footage
- Number of bedrooms, bathrooms, parking spaces/garage, finished or unfinished basement.
- Cosmetic finishing's like flooring, cabinets, appliances, and countertops.
- Most importantly the big ticket items like age of roof, furnace/AC, windows, water tank...
- Consideration is also given to economic factors that are likely to impact us here in Edmonton.
What Are The Benefits Of An Overpriced Listing?
The Realtor Still Wants To Sell The House
When the Realtor accepts an overpriced listing, in the back of their mind is the understanding that eventually the home will sell, but at the consequence of a price reduction. They will just need to work a little harder for it to happen.
Unfortunately, the final outcome will probably be bad for the home owner. Homes that sit on the market for an extended period of time often get a bad reputation. Extended days on the market are the sellers enemy. Buyers assume that something is wrong with such homes, and when they finally do make an offer, it is a low one.
Consequences For The Seller
So what are the consequences for the seller or overpricing a home? The seller can always drop their price right? No big deal right? As mentioned above, homes that sit on the market for an extended period of time become stigmatized. It is a fact homes priced incorrectly out of the gate sell for less than those that are priced properly. At the end of the day, when you price against someone who has more to offer, you’re selling THEIR home - not yours. If you are not competitive in an area that is saturated with sellers wanting to move their property, you will get left behind.
Looking for a Home/Market Evaluation? Let us know and we'll be happy to talk to you about the comparables in your neighborhoods and how it impacts your home.