Setting the listing price for your home is part art, part science. And with increased buyer activity in the market it makes this task just that bit more complex; because the market ultimately dictates your selling price.
The imperative in setting your listing price at a fair but attractive number is about attracting the right buyers to your property. Get your listing price too high or too low and quite simply, the wrong people will come looking.
The science of setting a listing price
This is complex and can involve many factors, including: comparison to similar listed and sold properties, property condition, its location, proximity to amenities, neighbouring properties, zoning, general market conditions, interest rates and of course buyer appetite, to name a few variables.
The art of setting a listing price
Let’s be honest here – the art of setting a listing price – is about gut feeling, which many agents wouldn’t admit to but can influence a listing price suggestion. A great agent will always do their research and gather the data, but ‘gut’ feelings, based on experience, can play a part.
So – remember our goal is to set a realistic listing price – what happens when some of the ‘science’ factors are vague, or your property has unique features, or buyers are really hungry for what you’ve got? Sometimes the best approach is to let the market tell you the price. And this is a good thing …
Most people when listing their property will already have an ‘ideal’ figure firmly in their grip. But that figure, as well as the one that the real estate agent suggests, is not always that important. Ultimately, what matters is what buyers think. Or put another way, what someone will actually pay.
It’s all in the offers
Research indicates that the first offers you get are usually the best. Rejecting these offers – holding out for a higher offer – can mean the difference between selling for a realistic price or selling for a heavily discounted price.
Buyers avoid properties that have been listed for too long, believing (true or not) that there must be something wrong with them and if they make an offer at all, will make the ‘let’s just put in a ridiculously low’ offer.
If a property is advertised at too high a price you can seriously damage your prospect of a quick sale. Start out with the end in mind. Think about who your buyers will be: a buyer with a budget of $500K probably won’t be looking at $550K properties. Price your property fairly and the right buyers will come.
More simply said than done at times, but properties that are priced correctly at the point of listing will always attract more buyers. And we all know that more potential buyers can deliver a greater selling price.
Your greatest risk to getting the price you want is setting the bar too high and choosing a real estate agent based on an unrealistic valuation.