Well, you have probably read it everywhere you have turned recently: The Toronto real estate market has shifted into a Buyer’s market! This has made it more difficult on sellers as their expectations may still be with last year’s prices. No matter how hard you as a seller may wish for yesterday’s prices it is important to respect today’s market facts – if you ignore what the market tells you today your home will sit on the market (but, “out” of the market – see previous blog about the 80/20 rule for an explanation of this comment) and you will not make as much money as if you had priced it “in” the market…
Creating a fair yet attractive price is essential to a successful sale. But it isn’t easy easy! Buyers are ofter well informed about recent events in the marketplace. They select homes by comparison shopping and are very aware of subtle differences in features and value from home to home. In their eyes, your price must be justified in comparison to other available homes.
Obtaining the best return for your property requires competitive pricing from day-one (you only have one chance to make a good first impression). A home should be priced according to recent market data comparisons.
There are a number of factors that influence the value of your property:
- Prior Sales
- Market Conditions
- Competitive Market Analysis
Taking these factors into account, we will prepare a competitive market analysis to reflect the current market value of your property. It includes an examination of your property as well as a study of competitive properties currently on the market and those that have recently sold. This information helps you to properly position your property.
No Realtor can control market value. The selection of a listing agent should be based on their service, fees and reputation, not on their estimate of market value. It is the ‘invisible hand’ of the market that determines the sale price you will ultimately achieve.
Competitive Pricing vs. Overpricing
First impressions are lasting. A house realistically priced and properly presented from day-one offers the best opportunity for you to sell quickly and obtain the best price.
Qualified buyers and their agents have been looking in your area and waiting for a suitable house at an appropriate price to come on the market. If reasonably priced, it is possible your property will sell quickly to waiting buyers.
Competitively priced properties encourage reasonable offers, pleasant negotiations and a smooth closing.
Overpricing costs in terms of money, disappointment, and missed opportunities. If the price is too high , buyers may not even look at an otherwise attractive property.
An overpriced property can go stale after the important first few weeks when the home is new on the market and getting the most exposure. Then, when the price is adjusted at a later time, the house is often overlooked.
If you were able to arrange a sale for substantially more than comparable properties it may fail to close through difficulty securing an appraisal and mortgage financing.
The Paradox of Price: When the ‘price is right’ buyers get involved quickly and sellers gain a competitive advantage. Use the paradox of price to your benefit. If you have the will to set a compelling price, the reaction of the marketplace will amaze you.