Common query clients ask real estate agents is how much their home is going to be sold for.
As their agent, you should explain to them that real estate agents do not make up the price; the market makes the price.
Sometimes homeowners want to go for the highest price for their house and it is unfair for people willing to buy the house. You cannot value a house twice its real value; you will notice how your house will stay on the market and the longer it stays for sale, the more people will start to wonder why the house is not getting the buyer and thus, the value of your house will decrease.
While pricing too high will not help you, pricing low can help you raise your price in the future when buyers make offers over your set price.
The first step is to compare your price to other ‘on sale’ properties in the vicinity. You want to make a listing of the prices of all properties over the last six months. Try to look for properties that are similar to your client’s property.
If you do not know what key points to consider while comparing, you may want to check the list down below:
- Properties of similar ages.
- Similar square footage, having a marker of 10 % up and down.
- Similar physical properties such as garage or garden.
Initial Price versus Sold Price
When you finally have the properties which are similar to your property; you will be able to compare the initial price the houses were bought to what price they were sold at. This will allow you to note the price reduction. Normally, houses are sold for less than their buying price, because of the market fluctuations.
When you have collected all information about the surrounding property, you will want to analyze them based on the current market.
For example, you have selected three properties that have comparable prices to your property. You will want to adjust the price to your client’s house condition, or you can place it between a range, so there is room for negotiation with your buyer.
As you may have noticed, we’ve talked more about other properties rather than your own house, but this does not mean that you should ignore what your house has to offer. How many bedrooms or bathrooms, special features like basement or master suite… are all options that have a lot of potentials.
Do not believe every site that allows you to price your property. Most of them do not compare with the other properties on the market and do not consider the existing competition.
One of the worst things to do is to wait too long to sell your house. When your house enters the market, you may have different potential buyers and sometimes people tend to wait to have the ‘perfect buyer’, but let me tell you, the perfect buyer does not exist. The more you wait, the more your house becomes obsolete for the market and will reach fewer potential buyers.
When your client receives an offer or different offers (hopefully), make them think about the next move. If they are not comfortable with the price presented, try to negotiate with the different buyers and see if you could probably go higher.
Pricing your house in a busy market will be difficult, especially for a real estate agent, as sometimes your client won’t agree with the prices you are presenting to them. Clients often have an emotional connection and they do not believe that their house could cost a lower price than what they quote. It is your job to make them understand that they can lose the opportunity of selling their home at a good price. Let us know in the comments how you price your client’s property…