HOW TO Price Your Home For Sale

There are many reasons not to test the market

By Mark Millington

10-03-2018 |
Did you know that a realistic pricing strategy could greatly enhance your prospects when selling your home? Put simply, it means that the market dictates the sale price.

However, if you choose to determine the sale price, with an unrealistic expectation, you may well be hampering the sale. Why? There are many reasons not to test the market this way.

You won’t get offers
If you price your property too high, you’re helping to sell homes in the neighbourhood who have listed for less. After seeing your high-priced home, buyers may choose to buy the better-value house nearby.

You lose credibility
Buyers are savvy. They’ve usually done the research and have a ballpark idea of what properties in your neighbourhood are worth. When you price too high, you risk being overlooked by serious buyers.

Not everyone likes to ‘Make a Deal’
Vendors often put a high price on their property leaving room for negotiation. The problem with this tactic is that if buyers overlook your home because it’s out of their budget, there will be no one to negotiate with!

Realistic expectations
It’s important that sellers realise what their home is likely to sell for. If you price a home too high, you not only waste valuable leverage time but miss opportunities with potential buyers.

Time and opportunity is lost
Sellers are in the driver’s seat for the first 30 days that a house is on the market. However, the ideal scenario is that you price to sell in the first two weeks. That way, you stand to get multiple offers. Why? The listing is new, so you have buyers’ attention.

Your house gets stale
If your house is on the market longer than 30 days, buyers will start wondering whether something’s wrong with it. When you price your home too high, buyers and investors may wait until you lower your price (that’s if they haven’t purchased elsewhere!) But the real problem arises when you drop the price as you often get less for your house than if you initially offered a realistic price.

It’s a common occurrence that the longer a house sits on the market, the larger the discount from list price to sales price.

Buyers won’t see your listing
People generally set up price search parameters when looking for a home online. Let’s say your house is worth $419,000, but you’re asking $450,000, you won’t capture buyers who search for houses within the $400,000 to $425,000 range.

But, if the house was priced according to the market, it would show up in the buyer’s search results so buyers would actually get a chance to view your home.

The house won’t meet a valuation
If you’re selling to buyers who are arranging a mortgage — in other words, most buyers — the lender will need a valuation. If comparable home sales over the last six months and current market conditions don’t support your sales price, then your buyer won’t be granted a mortgage

So, here's our expert advice. If you're set on a higher price, consider making improvements that will add dollar value to your property. Click here to check out our guide 101 Tips to Presenting Your Home For Sale

To gain further tips and expert advice to assist with the sale of your property contact our professional team on 0243591555 or click here to book a time for a property appraisal