What should you know about Ontario if you are planning to relocate? When we talk about moving to Ontario made easy, we usually focus on the move itself. Should you hire movers or organize a DIY move? How do you efficiently pack for your relocation? But there is a huge step in the moving process that happens before all this and it’s selling your old house. And selling a house is not always as straight-forward and easy as you may think. One of the first things you will need to do when listing your property is to decide on a price for it. And that just so happens to be one of the most difficult decisions you will make, too. These handy tips on pricing a property for sale should help you with that!
To go high or low, the question is now
You probably have at least some idea of how much your property is worth. After all, you did buy it. But is that the price you want to set on it? Should you go lower? Or do you maybe have the chance of selling for a profit?
Well, it all depends on the market and on your pricing strategy. Interest in a property peaks around three weeks after listing. If you’re asking for a somewhat higher price, this window of time is your best chance for a sale. A higher price also allows you for more wiggle room – you can always lower your asking price at a later time. The problem with overpricing a property, however, is that you may not succeed in selling it before interest wanes. At that point, even cutting the price may just be too little too late. The high price tag may become one of the main reasons why your house isn’t selling. Remember – you can ask for any number you want, but that doesn’t mean you can actually sell for that amount.
The other strategy is to underprice the property from the start. A lower initial asking price will attract more potential buyers and more offers. This can create a bidding war that eventually drives the price of the property up. The downfall of this strategy is that bidding wars are unpredictable and you never really know how high or low they will really go. And if your home’s appraisal ends up significantly lower than the offer, your sale may even fall through.
Hiring professionals to help with pricing a property for sale
A professional realtor could be the solution to your dilemma. They can help you decide on the best strategy and settle on a price. And that is not all. They will also help you with the paperwork, stage your home and negotiate on your behalf. Just like hiring local movers in Ontario to handle your relocation is a good idea, hiring a professional to sell your home can be a smart move.
Review comparable listings and sales
When you start doing research into the local real estate market, hiring a professional realtor may prove to be a great idea. They will help you with pricing a property for sale by providing you with a Comparative Market Analysis or CMA. This is a comprehensive compilation of recent sales in your area which includes information about the properties, the amount of time they spent on the market and the final price they sold for. This can help inform your decision on an asking price for your own home.
Even if you do not want to work with a realtor, you may want to contact a few of them and ask for a CMA anyway. Most realtors will provide potential clients with one for free. This saves you the time of doing the research yourself.
You can, of course, search sold and listed properties on your own too. The important criteria you should base your research around is that homes are:
- within 1/4 to 1/2 of a mile from your property
- roughly the same age and size as your house (no more than 10% larger or smaller)
- listed in the last 3 months
Other things that can affect the decision of pricing a property for sale are neighborhood borders, accessibility, and desirability.
Learn from your competition
It’s not only the recent sales that can help you out. Comparing the original asking prices to the prices the houses eventually sold for can give you an idea of what buyers are willing and able to pay as well as which direction the market is moving in. You may even want to check out the properties that were withdrawn or allowed to expire. Try to figure out what went wrong with those sales. Then, avoid making the same mistakes. This is another point that a realtor may be able to help you with so work with them to develop the best possible strategy.
Can you change your mind?
You can, of course, always change the asking price. Even with the best of research and help, you may still overprice your property. It is, after all, difficult to be objective about the worth of your own home. Keep in mind, however, that it’s always better to do a single major correction to the price than many smaller adjustments over a longer period of time. A sudden price cut may attract more buyers. Constant changes make you seem uncertain and suspicious.
Adjust for the current state of the market
There are two major things to consider when pricing a property for sale: the season and the type of market. Spring is generally the best time to sell as it is when most families prefer to move. Fall is a close second with vacations behind us and new school years ahead. Summer is not ideal as most people would rather vacation than buy house and winter is the slowest season due to bad weather and plenty of holidays.
The type of market is defined by the basic principle of supply and demand:
- a buyer’s market is when there are more homes being sold than buyers willing to buy them; pricing lower than your competition is the best strategy to attract buyers because they will have plenty of choices
- a seller’s market is when there are more buyers looking to buy houses than properties being sold; you can get away with adding about 10% to your estimated price as buyers will have fewer choices
- a neutral market is when there is a balance between buyers and sellers; you will have to rely on comparables when pricing a property for sale
Take your time and do thorough research before making your final decision. Remember – the right price will attract buyers and have your house off the market as soon as possible!