How To Price Your Home For Sale
Do you know what your home is worth? Do you know what your homes will sell for? Probably not!
We all want to achieve the highest possible sale price for our home. Consider this when establishing an asking price. In 2014 - 6,638 homes were listed in Cambridge and 3,131 of them sold. This means that only 47% were able to sell their home. So, how do you join the SOLD percentage?
Pricing your Cambridge, ON home accurately is very important to achieving a sale, so be realistic. The price is the first thing buyers look at and if they feel your home is overpriced it can linger on the market, or encourage buyers to look at other options. Remember - Although you set the asking price, the value of your home is determined by what buyers are willing to pay. No matter what condition your home is in, ultimately you MUST price it accordingly.
What Affects Your Asking Price?
- Urgency - How quickly must you sell?
- Competition - Are there just a few or many homes available in your price category and area?
- Available Financing - Does your home come with an assumable loan that is below today's rate? What are the current home loan interest rates? What financing alternatives are available for your home and area?
- Home Evaluation - Do you know what similar homes in the area sold for within the last six months to 1 year?
- Expenses - What are your selling costs?
- Location - The same home could have several different sales prices depending on where exactly it is located. Keep this in mind when comparing your home to others.
- Smart Renovations – Not every improvement will net you a higher sale price, but, money that has been wisely invested typically will. Speak to your Realtor if you want to know the best places in your home to invest.
What Doesn't Affect Your Asking Price?
- Original Purchase Price - Your price is determined by today's market.
- Over Improvements – Every price range brings different expectations. And not every improvement you make is going to equal a higher sale price. Potential buyers will evaluate your home and may include the costs to remove or replace items, or deem certain features unnecessary for the home or their enjoyment.
- The Cost to Build Your Home Today - A replacement value is determined for insurance purposes only.
- Personal Attachment & Emotions - Buyers purchase a home based on their emotions, not yours. They may not see as much value in the items you are attracted to.
- Neighbours Claims – The neighbour may not be as informed as they think. People could misinform you as to the price they bought or sold for, or their home may not be as similar as you think. Also, the terms accepted by both the buyer and seller can greatly affect the sale price.
What Happens to an Overpriced House?
- You'll Help Sell the Competition - The "correctly priced" homes look even better if yours is overpriced. Most buyers are competitive shoppers and will look at all the options.
- Your Home Will Stay on the Market Longer - Did you know that 80% of your potential buyers will see your house in the first four to six weeks? If you don't sell them then, it takes approximately three months to replace them with an equal number of newcomers.
- You'll Lose Market Interest and Qualified Buyers - Serious buyers use the value, quality and price of similar properties as deciding factors.
- A Negative Impression is Created - People will wonder why your house is still on the market. they'll believe something is wrong with your home, when really there isn’t.
- You (The Seller) May Lose Money - You may have to make extra mortgage payments as well as incur taxes, insurance and unplanned maintenance costs.
- You (The Seller) May Have to Accept Less Money - Studies show that the longer a house is on the market, the greater the discount off the list price. Often a seller will accept less than fair market value in order to sell because of an approaching deadline.
- There is the Potential for Appraisal Problems. The appraiser from your buyer's lending institution must agree that the home is worth the purchase price. If the appraiser believes the price is inflated, the loan may not be approved.
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