The primary when looking to sell a home is to do so in a timely manner at a price that covers the closing costs (commission, lawyer’s fees, property taxes, etc…) and hopefully some extra money in your pocket. Unfortunately, this is not always possible, especially in a buyer’s market.
Home owners tend to attach a sentimental value to their home for a variety of reasons. First and foremost, this is the home they’ve shared as a family for a number of years, and to them the memories add personal value. Any additions or improvements made since living there also add value in the eyes of the seller because it was their dollars and sweat equity that went into making those improvements a reality. Many times, against the advisement of the Realtor, sellers will overprice their homes to account for these reason, not taking into consideration that another person will not attribute the same value to the home as someone who is emotionally attached to it.
The truth is, when selling a home you need to look at the home’s value objectively, not subjectively. This is a common mistake made by sellers who list their home at a price higher than actual market value. The consequences of overpricing are that the home will sit on the market for too long, remain unsold and become stale. When a house sits on the market for too long, potential buyers who are serious about purchasing may overlook the property with the assumption that there’s something wrong with it. Other buyers might not look at houses outside of their price range. For example, if you price your house at $650,000 when it should be around the $600,000 mark based on comparable sold properties in the neighbourhood; buyers who have a budget of $600,000 likely won’t take a second glance at the home thinking there’s no way they can afford it. Had the house been priced properly from the start, it might have sold. This is where the “Principle of Substitution” comes into account that states nobody will pay a higher price for something they can comparably purchase for a lower cost.
In a buyer’s market, it’s especially important to ensure your house is priced adequately. There’s a tool REALTORS® use to find a price for your house called a Comparative Market Analysis (CMA) that compares the price of similar houses currently listed, recently sold and recently expired to your house.
At Seller Direct® Fort McMurray, our goal is to educate sellers as to the current market and help them find a listing price that will get their home sold in a reasonable period of time so that they can reach their future goals. Preparing a detailed CMA is part of this service that we are happy to provide at no cost.