Pricing Your Home Right
What's the most important factor to consider when selling a home? Price. The value at which people sell their Calgary homes can determine so much for their financial future. Many sellers struggle with the decision of pricing their home competitively, or pricing their home with the hopes of “catching the big fish” and making more on their home than it's currently worth.
Sellers should take a look at their overall goals to determine what price they should list their home for. Furthermore, they should also put themselves in the shoes of the buyer. When purchasing a home, consider what the purchasers are looking for and why. Keep reading to learn about some of the penalties of pricing your home too high or too low.
Cutting Yourself Short
Sellers who price their home low will likely sell their property very quickly. Buyers will appreciate the competitive value of the home and likely snatch it up within a very reasonable amount of time. However, this could have a negative impact if the market turns to favour sellers and they've already let go of their property. They'll have missed an opportunity to sell their home for top-dollar.
Additionally, sellers will want to consider when they will be buying their next home. If selling in a buyer's market, it's also wise to buy a new home at the same time before the market turns. If the market increases before the purchase of the next property, sellers will definitely be regretting pricing their home so low. It's important to be thinking about the long-term effects of pricing your home.
Waiting For A Big Fish
Let's take a look at pricing a home above its current worth. This is a very common practice that sellers participate in. Sellers often think a buyer will fall in love with their home and will pay top dollar for it. This is very risky and can have more of a negative impact than a positive one.
Buyers look at two things when purchasing a home: price and how long the property has been listed for. If a home is overpriced, chances are, the seller isn't that eager to sell and their home could be listed for a while. If a Calgary home has been on the market for too long, this creates a stigma and waves a red flag to buyers. They start to wonder what is wrong with the property and doubts have been cast in their mind.
Eventually, sellers become eager to be relieved of their property and have to do a price reduction. Generally, price reductions have a domino effect with other homes in the area. It can then become difficult to price a property competitively and sellers will have to price their home even lower than market value.
Sellers always risk a turn of the market and if it slows, they'll be waiting even longer to offload their property. Furthermore, as sellers have their own home listed, they generally search for their next property. If they successfully find their dream home, they risk having two mortgages simultaneously.
The Best Option
Consequently, it's in the best interest of the seller to price their home based on their real estate goals. If they're eager to sell, pricing their home 1-2 percent below market value makes them extremely competitive and the properties are likely to sell quickly. Any lower than 3 percent puts the seller at risk for a financial loss that could have been avoided.
Sellers who price at market value should be able to sell their home in an average sales time. Therefore, it's wise to price competitively from the beginning to receive the best value and to sell in a timely period.
To learn more about pricing your Calgary home competitively, contact the Justin Havre at RE/MAX First real estate professionals or call 403-217-0003 today!