Pricing a property is perhaps one of the most controversial steps to a real estate process and can often become a point of contention between property owner and a real estate agent.
The difference between the time and money you’ve poured into your property and what the market says your property is worth may be far apart in your mind and that can lead to a lot of confusion and hurt feelings.
The balancing act here is clear. If you price your property too low, it will sell very quickly but you will lose some of the equity you’ve worked so hard to build up in your property. If you price the property too high, your property could sit on the market for an extended period of time and while you may end up getting more than a low ball offer for the property, you will have to go through months of waiting to do so.
Establish Your Needs
By telling your real estate agent exactly the kind of real estate transaction you are looking for, you can make the pricing process much easier on your agent. If you are looking for a speedy transaction above all else, your real estate agent may feel a bit better about pricing the home aggressively. You may not get as much as you could for the property, but the pricing technique would fulfill your primary objective.
Conversely, if you are more than prepared to wait out a better price, tell your real estate agent that this is the case. The default strategy for many real estate agent is to set the price of your property a little higher than what the market would really dictate with the knowledge that it can always be lowered later if interest is not sufficient. You can support this strategy if you make it clear that you don’t mind the wait.
Keep Your Competition Close
Pricing a property is most often an exercise in determining where the property fits amongst all of the other property on the market. If your home is a little bit nicer than one priced at #30 million maybe your real estate agent can use that as a basis to price it at #32 million. The actual process is much different, but the idea is basically the same.
However, when your real estate agent does this comparative market analysis, make sure that all factors are taken into account. It is of course possible for a home near yours to be overpriced and if you put too much credence on that one competition, you could similarly overprice your property. Make sure that your agent is doing the proper homework to include not only properties on the market but those that have sold and those that have been withdrawn while paying attention to the time spent on the market for each.
Have You Kept Up Your Property?
Does your property look great for prospective showings or does it look worn down? Does your home convey the sense that is solid and will last or does it seem shaky or look like it might need a lot work? While your home may have all the amenities of the comparable homes you have used to set your price, the overall condition of the property can greatly modify that price.
It can sometimes be easy to look at the number of bedrooms and bathrooms and then set a price from there. Square footage, for example, is important, but it means less than in other homes if it is not used well or looks run down. Always make sure to keep in mind the relative age and condition of your property when pricing as that’s exactly what a buyer will keep in mind when the time comes to make an offer.
Pricing a property can be a difficult task, but doing so from the right foundation can give you the exact transaction you are looking for. The condition and general area of the property can greatly alter the price, so work with your real estate agent to make sure that you not only tailor the transaction to your needs but that you also do adequate homework to ensure that you have priced your property accurately.