Pricing your home accurately is one of the many critical components to a successful transaction when selling your house. Similarly, recognizing when it’s time to adjust the price is equally important. Selling your house, or even listing a property for rent, may put you on an emotional roller coaster. From the financial implications of not selling or renting quickly to market changes or the stress of coordinating the closing with a house you bought, and just the idea of leaving your family home, are all likely to cause some degree of emotional havoc. It’s important to control your emotions when listing your house for sale or rent and rely on your real estate agent to advise you.
From our experience, this isn’t typically what happens. As real estate agents in Milton, Oakville and the surrounding Halton and Peel regions, we often experience two types of situations when it comes to price adjustments in this market. The first is when our clients are concerned about a lack of activity on their property, they get scared and want to reduce the price prematurely and; second is when they arbitrarily hold firm to an unrealistic number while properties around them are selling.
Consider this when deciding if it’s time to reduce the list price of your home when selling, or renting:
Pricing Real Estate Using Facts
When deciding on the initial selling price of your home, or an adjusted price, get rid of personal bias, sentimental value and a personal goal that may exist and look at the facts:
- Select comparable and recent sales that exist close to your home
- Adjust the selling price of those properties for differences that exist in your home vs. their home
- Realize that your basement that cost $50,000 to finish probably won’t add $50,000 in value as compared to the exact same house that doesn’t have a finished basement
- You can’t recoup the money you put into your house just because you want to – the market will tell you how much something is worth
What’s going on in the Real Estate Market?
When deciding if it’s time to reduce the listed price of your house that’s for sale, you’ll want to pay attention to what is going on in the market. Consider these things:
- Have similar homes been selling nearby?
If not, this could be a sign that the market as a whole is down and you may want to sit tight. If other homes are selling, there’s likely a reason, be it a feature of your home (or lack thereof) or the price. There are many things that can cause intermittent blips in the market such as holidays, political events and weather –good and bad. - Are buyers visiting but no offers coming in?
If people are visiting your house, that’s a sure sign that buyers exist. Perhaps there’s something about the house that needs attention, not necessarily the price. Have your Realtor call other Realtors for feedback on their experience at the house and be open-minded to suggestions. - What is the average amount of time that it takes to sell a house like yours right now?
Three weeks on the market may seem like a long time but if the average is six, you may need to be patient - Has the market changed since you listed your house for sale? Are there comparable homes now for sale that weren’t available before?
It’s imperative that your Real Estate Agent is aware of what’s happening in the neighbourhood. If a neighbour goes to the market a week after you and strategically prices their home to compete against you, making a quick price adjustment to yours could make or break your sale. - Stay Ahead of the Real Estate Market
It’s important to stay ahead of the competition. Recognize trends and see where the market is going. If you wait too long to reduce your price, you may find yourself adjusting again in a week to keep up. You may be better to price slightly more aggressive in a downward market to stand out against your competition.
Be Aggressive with Price Adjustments
We often see people do multiple, incremental decreases of small amounts of money on their home over an extended period of time. Had they of done a more significant decrease the first time, they likely would have caught the attention of somebody and probably sold for more than the end result of doing it the other way.
That pretty well sums it up! There are a lot of things to take into consideration when pricing and doing price reductions. Interview multiple agents and find somebody that you trust and one who will provide guidance –good luck with the sale!
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The Kormendy Trott Team was founded in 2011 by Ariel Kormendy and Adrian Trott. The team of two quickly became the 17th highest producing team for Century 21 in all of Canada and have since grown the sales team, added a media department and expanded their service from being real estate agents in Milton to now servicing all of Halton, Peel, Wellington, Hamilton and surrounding areas.
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