Your asking price speaks volumes, so you and your realtor had better get it right the first time around
"If a home doesn't sell, 80 per cent of the time it's because of the price, " says Maureen O'Neill, president, Toronto never goes away - it becomes a part of that home's permanent history."
Correctly pricing your home at the outset is the key to getting what it's really worth. It's also vital because price is the very first consideration for most buyers with the budget deciding everything from the location, size and layout to the amenities.
" The more realistically your home is priced, the better the chances you'll get what it's really worth," says O'Neill.
Increasingly sophisticated buyers and their realtors have a pretty good understanding of what homes in your neighbourhood are worth. Most are also working with a budget, particularly with the pre-approved financing and will be relying on the MLS system during the initial searches. Price it too high or too low and you'll miss out on an entire group of buyers. "If a home doesn't sell, 80 per cent of the time it's because of the price," says Maureen O'Neill, president, Toronto Real Estate Board. " The asking price never goes away - it becomes a part of that home's permanent history."
Correctly pricing your home at the outset is the key to getting what it's really worth. It's also vital because price is the very first consideration for most everything from the location, size and layout to the amenities.
" The more realistically your home is priced, the better the chances you'll get what it's really worth," says O'Neill.
Increasingly sophisticated buyers and their realtors have a pretty good understanding of what homes in your neighbourhood are worth. Most are also pre-approved financing, and will be relying on the MLs system during the initial searches. Price it too high or too low and you'll miss out on an entire group of buyers.
Some sellers' mistakenly believe they can decide how much they want for their home, then add the commission to that figure to come up with the asking price. Unfortunately for the seller, if you do it that way, your asking price will be over market value. Accept the fact the commission will be taken out of the price you get for your home.
It almost always takes longer to get that higher price and the greater the number of days or months on the market, the greater the buyer's negotiating power. Of course, if your home is over-priced, you can drop the price, but that can make buyers suspicious or motivate them to play a waiting game. Price your home below the market average and potential buyers will make certain assumptions and even shy away because they're anticipating a bidding war, expensive repairs or nasty neighbors.
While the market ultimately has the most impact on what your home is worth at any given time, a properly priced home will sell closest to true market value. You and your realtor must do your research. Take advantage of area open houses to check out the competition. Even an experienced realtor that knows your market first hand should do a comparative market analysis.
Realistically, location has more of an impact on price than anything else, because it's the only factor you can't change. About 70 per cent of any home's value is determined by its location, says O'Neill.Virtually everything else, from the home's square footage to the number and size of the room as well as the amenities and finishes can be changed. Certain renovations, most notably those in the kitchen and bathroom, will enhance the home's value but you'll still get just a percentage of what you spent. For the past five years, consumers have been more focused on renovated homes than the fixer-uppers.
"Renovate for yourself and live in it to get your money's worth- don't renovately shortly before you sell, " says O'Neill.
However, if you have the money, definitely do all of the required manitenance and repairs before putting the home on the market because today's buyers will use the home inspector's report as a negotiating tool. Your house may be perfectly priced based on CMAs and market conditions, but buyers will offer less if it will soon need a new roof, furnace or repairs to the foundation.
To get full market value, you'd also be wise to commit to a thorough decluttering and cleaning and consider investing in a professional stager to put an extra $10,000 to $ 15,000 in your pocket. Ninety per cent of buyers can't see past the dirt, the clutter and personal mementoes so you have to get rid of it for them.
"Buyers will do the same research and homework you're doing and will ask tough questions about how you arrived at that price, so sellers need to look at the stats and price accordingly," says O'Neill.