Sometimes Realtors run into all kinds of funny notions that prospective Sellers have with regards to the price of a home. Particularly, the price of their home.
Common criteria that Sellers want to use to price a home;
- If I buy ‘X’ Property, it requires $20,000 in renovations. We can’t list my house for less than (what you suggested plus $20,000)
- My neighbours home sold for $400,000 just this Spring. My home must be worth at least as much.
- I just installed this gorgeous pool and also marble tile from Italy and the paint that we used on the walls was special order and extremely pricey. This MUST be factored into our listing price- surely buyers will pay extra for these features?
- I owe ‘X’ amount on the Mortgage, plus have a significant amount of outstanding debt that needs to be paid off in order for me to purchase ‘Y’. We must list this house for X plus all of the debt, even if it exceeds the listing price that you have suggested. And, while we are at it, let’s factor in commission and legal fees.
- This house and property are fantastic. It must be worth at least $500,000.
However in reality, factors that help determine the best way to price a home are;
- Recent comparable sold prices. Comparable meaning apples to apples. If your neighbours home had granite tops and hardwood floors, and yours has laminate countertops and carpet, that must factor in to the price.
- Current listings on the market in your price range and area. AKA- ‘The Competition’.
- Market state- ie- is it a hot sellers market, or more of a buyers market? Or, perhaps a balanced market?
What role does your Realtor play in determining the best price for your home?
Your Realtor will provide you with a comparative market analysis of your home, which takes into account all of the above factors. Do note that the best listing price can be a bit of a moving target. What looks best today can quickly change tomorrow based on new market activity, interest rates, etc. In general terms, the market determines selling prices. A home is worth only what a buyer is willing to pay.
Sellers; overpricing your home can be very detrimental to the actual selling price- read more here
Buyers; it is important to be cognizant that not all homes are priced properly on the market. Don’t allow yourself to fall into the trap of purchasing a home that is over priced. Doing so can mean that you are ‘stuck’ with your purchase for many many years to come.
My recommendation is to always use the services of a Buyer Agent that is familiar with the local real estate market and prices. This applies to the purchase of both MLS AND private sale properties. Now more than ever, with so many alternative avenues for purchasing a home, it is critical that Buyers protect themselves from the pit falls involved in potentially purchasing an over priced property.
If you are currently navigating the Real Estate Market as a home buyer and are unsure where to begin- please reach out! I can be reached directly or via text at (807) 627 3685, or email firstname.lastname@example.org
I look forward to helping you!