By Rob Farmer
Everything you see and hear says your property is worth $600,000. But wouldn’t it be great if someone paid $650,000? Imagine what we could do with an extra $50,000.
So here’s the dilemma: Do you list the property for sale at its market price or your dream price? Dreams inspire excitement and lead to plans for a brighter future, but what happens if they come crashing down? Isn’t it better to be realistic from the beginning?
Unless your property is exceptional or has a “wow” factor that will provoke an outstanding offer from an emotional buyer, experience shows it is best to price your property near where you expect it to sell. That way you attract the buyers you are looking for – those with enough money to pay for it. If you price it too low you risk encouraging people whose budget does not extend to your selling price and if you price it too high you restrict people who can realistically buy the property from ever stepping inside.
A basic rule of real estate is that buyers want to see value in what they are purchasing. Today’s buyers are savvy. They have more information at their fingertips than ever before so they are more educated about the market and they know what’s been selling and for how much.
When you are thinking of selling, pretend to be a buyer of your property. Look for comparable properties, inspect them and talk with the agents to gain first-hand knowledge of how the market is performing. Test your market research with what the agents are telling you.
In assessing the market value of your property you must compare apples with apples. Look at recent sales of similar properties in your neighbourhood. Not their advertised prices, but the sold prices. And not properties that sold last year or in the next suburb. Even if a property of similar age and size sold across the road, are there factors that make it worth more or less than yours?
The bottom line is that you need to advertise your property to give it the best chance of selling for its maximum price. Ideally, you want to sell the property quickly. The last thing you want to do is have the property sitting on the market for months, having buyers ask why no-one wants it.
Research shows that 80 per cent of buyers become aware of a new listing within two weeks of it being advertised. With a realistic price, most properties will sell within the first weeks of a sales campaign at an optimum price. Except at the peak of a boom or for remarkable properties, overpriced properties become stale and generally sell for less than the optimum price, and after months of wasted time, heartache and expense.
Many ambitious vendors have confronted the hard lesson that properties rarely sell for their highest price two months after being listed for sale if they attracted offers within the first fortnight of advertising.
Your estate agent will guide you in every aspect of your sale. They will have an unbiased opinion of your property’s value. Ask them to provide evidence to prove the price they suggest. Base your price on market results and remember the market moves. What was reality last year can be vastly different now.
Your agent is a professional working in the market every day. Trust their experience and knowledge and be prepared to go with it. If you don’t, you should not have selected them as your agent.
Beware that some agents promise high prices then fail to deliver. They try to buy your business by suggesting a sales price well beyond what other agents believe. They prey on your attachment to the property and appeal to your dream of winning a trophy price. But one price quote way above others should ring alarm bells because all the agents have the same sales data on which to base their price estimate.
Price is only one part of a sales campaign which includes presentation, marketing that highlights the best features of the property and the choice of agent and selling method. But when an accurate price is included in a well planned sales strategy, you have every chance of gaining the very best price with the minimum of stress.