When you decide to sell your property, you want to sell it for as much as possible, but remember THE MARKET WILL DETERMINE THE TRUE VALUE of your property…your real estate agent brings the market to you, the market brings you the price.

A Comparative Market Analysis will help us establish the RIGHT LIST PRICE for your home based on current market conditions and the condition of your property in relation to other properties listed FOR SALE in your area.

 Some of the Major Factors that Influence Overpricing:

• Urgent need for money

• Original cost of home too high

• Desire to buy in a higher priced neighbourhood

• Lack of real estate information

• Extensive renovations/hidden costs

• Building in bargaining room

• Perceived emotional value

You may think interested buyers “Can always make an offer”, but if the home is overpriced, potential buyers looking in a lower price range will never see it.  Those who can afford a home at your asking price will soon recognize they can get better value elsewhere.  The wrong price attracts the wrong buyers and in fact may even sell your neighbor’s home, which is priced lower and correctly.

When a new listing comes on the market there is a flurry of activity surrounding it.  This is a crucial time when agents and potential buyers sit up and take notice.  If the home is overpriced it doesn’t take long for activity to die.  By the time the list price is brought in line a large percentage of buyers are lost.  On occasion, the list price drops below market value because the seller runs out of time and the property sells for less than it is worth.

The Benefits of Using the Right Price Should be Obvious:

• Your home sells faster.

• More potential buyers view your home.

• Your home never loses its marketability.

• There is less inconvenience to you.

• The closer the price to market value, the higher the offers.

• Sales agents will focus more energy on your saleable property.

• A well priced home can generate competing offers.

 The Relationship Between Market Value and The Listing Price:

The listing price is a key component of the valuation and sale of a property in the marketplace.  The closer the list price to market value, the more likely that a higher sale price will be realized within a reasonable period of time.  A list price at or close to market value will attract the most number of serious buyers.  A heightened demand will usually translate into a higher selling price.

Simply put, a buyer, upon seeing a well priced property, will become anxious to make a good offer before anyone else realizes the property’s excellent value.  As a result, it will be the seller and not the buyer who will be able to negotiate from a position of strength.  Therefore, under normal circumstances, it is very likely that the buyer will pay top price to get the property before anyone else does.

While there are no absolutes concerning listing prices, it is generally recommended that the list price b no more than 2-3% above the estimated value or top end of the value range.  If the estimated value is $204,000, then a list price of $209,900 should be seriously considered.  Of course you should also look at other similiar listings on the market which represent the current competition in determining the proper listing price.

Often, sellers misunderstand the process of determining a listing price.  You can often hear them say “Let’s list the property 10% higher just in case we get lucky" or "we need to list the property 10% higher to leave room for negotiations.”  In both cases, a listing price 10% higher than the market value could very well be overpricing the sellers property.  If the list price is indeed too high, then the seller’s property will probably be eliminated by the serious buyers who otherwise would have considered buying it.  In fact, serious buyers may either not look at the property at all or will use it to justify buying another property that is much better priced in comparison.

Of course a buyer may still make an offer on an overpriced property.  However, in these situations, it is the buyer that will be in a position of strength in the negotiations as he/she will be aware that they will not be in competition for the property.  Indeed they may be the only offer that comes along.  As a result, they will often be able to negotiate a price at the low end of or below market value (depending on how long the property has been on the market and how frustrated and desperate the seller has become).

Some sellers will counter the argument that the listing price is too high by saying “You can always lower the listing price later.”  The problem with that belief is that a property will eventually suffer from the problem of Market Staleness.  As the weeks drag on, fewer and fewer buyers will look at the property.  Buyers will often ask how long a property has been on the market and be very suspicious of a property that has been listed for a while.  Even where property is finally realistically listed after nine months of marketing, buyers will make remarks such as “There must be something wrong with the home, it’s been on the market so long” , or “The property has been on the market so long it must be overpriced”, or “The property has been on the market so long, the sellers must be desperate”.  The end result is often that an overpriced property is on the market longer than necessary and the price received is generally lower than it would have been if it had been listed realistically in the first place.

The message is clearly..... GET IT RIGHT THE FIRST TIME!

Gary & Candi Grant ... in Touch with the Heartbeat of Real Estate©

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