Pricing is the most important part of successfully selling your property. By over-pricing it, all you do is help other homes on the market to sell faster. By under-pricing it, you sell quickly but lose valuable profit.
Factors influencing the current market value of your home can include:
- The price of other properties for sale in your area
- General availability of properties for sale
- Social and economic factors such as interest rates, immigration, unemployment levels etc
Do your research:
In a fast moving market it can be difficult for anyone (including valuers and agents) to accurately appraise a homes value because it is constantly moving.
We provide our sellers with a comprehensive list of recent local sales of homes built of a similar age, size and number of bedrooms (the same information used by agents). Combining actual sales data with your own research of what is currently on the market, generally helps to establish an expected price range.
A cost effective ‘E-Valuer’ report from Quotable Value (www.qv.co.nz) can often give you a ball park figure and should all this research be inconclusive, perhaps due to a lack of similar properties in your area, then we would recommend an independent registered valuation.
Do I need a valuation?
No, however, sometimes it can be helpful having the back-up of a registered valuation to justify your asking price (particularly if a cheeky buyer tries to offer significantly less). While it’s the responsibility of the buyer to get one done if required by their bank for lending purposes, it can possibly save time and money if you have already had one completed (for a fee, valuers can often re-address a current valuation to the buyer or buyers bank).
Does my CV affect the market value?
Council valuations are often way off the mark, so avoid basing your price on these. It is however, important to look at the general trend in your local area; how much above or below CV are most properties are selling for. If you're outside of the norm, then buyers may want to know why (you can also seek a re-assessment if your CV is incorrect for some reason).
Beware of 'Free' agent appraisals...
Sellers will often have two or three real estate agents provide a ‘free appraisal’ on their home. Be aware that agents will often provide a price range, based around something they think they can achieve up to a top end figure, thrown in to impress you (known as ‘buying the listing’). Of course, this doesn’t mean that a buyer will be prepared to pay that amount.
Pricing your property in a changing market:
Slowing? growing? flattening off?
Whichever way you look at it, the property market is constantly moving. The way to achieve a quicker sale is to be fairly priced compared to other homes that appeal to the buyers you are targeting.
Always keep an eye on what is selling around you. If the market is trending downwards, perhaps consider an offer that is slightly lower than expected; what seems like a low price now might seem like a great result in a few months time. If prices are increasing, look at a putting a price range, 'Enquiries Over' style pricing or Auction.
Ask for feedback from potential buyers who view your home. If after four weeks of advertising you haven’t received an offer, think very carefully about re-assessing your price because the market could well be indicating you are too high. Don't be shy about changing your price as this is done all the time and buyers often pounce once you make the change.
What’s the best way to price your home?
Once you've done the research and figured out a price range, consult the team at HomeSell to help determine the best pricing strategy.
Common ways to price a home include:
Asking price of $....
Pro: Buyers feel more comfortable when they see a price (especially one they like)
Con: Unless value is easily determined, you may risk under or over pricing the property
Enquiries over $...
Pro: Works well if you have a realistic start point and feel comfortable talking to buyers
Con: Not so great if your figure is too high as buyers will think that's your minimum
Price By Negotiation (perhaps adding ‘Buyers Guide of $XXX - $XXX’)
Pro: Gives a lot of flexibility to test the market if you can't work out where the property sits
Con: Can be frustrating for buyers who are unsure about what you want
Tender or ‘Set Date of Sale’
Pro: Can work well for high demand properties and sets a date to have offers presented
Con: Buyers may be unsure what to offer and put it in the 'too hard basket'
Auction (unless sold prior)
Pro: Unconditional sale if sold under the hammer (or prior) and the Auctioneer does the negotiation for you
Con: By asking them to be 'unconditional' on the day, you may limit the number of potential buyers and therefore price
HomeSell customers successfully use each of these methods of pricing, however it's always best to look at current market conditions and speak to your HomeSell consultant about what is best for you and your property.