Does “Price” really matter when selling a home?

Does “Price” really matter when selling a home?
by Dave Williams

When you are preparing your home for sale the most important decision you are going to make is what Price you are going to offer the house for to potential buyers.  This is YOUR decision, and yours alone.

  • You may call a professional in the real estate industry, whether you are selling it yourself or though a Brokerage, to get their opinion, you may even call several…and you’ll be surprised when they each offer you a different price.
  • You may look at your property assessment and think “wow that’s low, this house has got to be worth more than that…” and you’d probably be right.
  • You might even pay a property appraiser to do a formal appraisal on your home, the same report they would submit to a bank when approving the buyers mortgage.

The secret though is no one knows what a house will sell for until the deal is done, until the buyer and you the seller agree on a price you are both happy with. Any one of those prices are nothing better than educated guesses.  So then how do you decide what price to offer on your house sale?

Make it the best value for the dollar!

You know what similar homes sold for, with a little research you can find out how the real estate market is doing, and you can easily see what competition is out there, it’s just a matter of putting it all together.

  1. What are buyers paying for homes like yours, in your area?  Call this your starting point.
  2. How is the real estate market today, this month? Based on the current trend you will want to adjust your starting point in the right direct, but not too much.  Be mindful that you want to lead the market trend, so in a rising market a little bit less than the trend makes a big impact on your saleability, and in a sinking market a little bit more is less, by pricing just slightly below the trend you can actually achieve a higher price. 
  3. Lastly, and what I consider the really telling factor of house price is the Competition.  What can a buyer, looking to buy a home today, buy with the same kind of money…and how does your house compare.   While you house could be the best on the street or even the neighborhood buyers are not that committed.

Here are a few examples of buyers and sellers we have worked with.

This simple chart should help you figure out how to price your home in today's market. If you were to rate your house price for the value of home would you be in the top 10% or top 50% of similar homes on the market. If you did the same for the condition and upgrades in your house where would you be on this chart? In the market - Top 30% for price and condition? or out of the market...

This simple chart should help you figure out how to price your home in today’s market.
If you were to rate your house price for the value of home would you be in the top 10% or top 50% of similar homes on the market.
If you did the same for the condition and upgrades in your house where would you be on this chart?
In the market – Top 30% for price and condition? or out of the market…

Family one, a military relocation to Ottawa comes into town looking for a 4 bedroom home, they are going to buy one this weekend.  They want  an open concept, gas enabled kitchen, spot for a hot tub in the back yard and it needs to be fenced.  They are willing to spend between $500,000 and $600,000.   Our buyers agent narrows the list of homes they will see down to 5, from Manor Park, to Blossom Park.  They bought in Riverside South.

You see here, a home in Manor Park was competing with Homes in Riverside South.  While this is a little extreme is should help make the point that you are not just competing with the home down the street anymore.

Family Two, have already bought a home in Qualicum and are selling their Riverside South town-home.  It is an end unit with a large pie shaped lot and one of the largest models in the development.  They purposefully choose to price their home at the same price a recent inside model with standard back yard.  There is nothing comparable in the area for sale, it’s a no brainer, they will sell next.  After 3 weeks and 17 showings they wonder why the home hasn’t sold. We schedule a sit down and call agent after agent that has shown their home (we’ve already spoken with them but it becomes important for them to hear it as well) and ask “did your buyers end up buying a home?  What did they buy.”  After the 5th agent tells us their buyer bought in Barrhaven, we do a search for the price range their home is in and find when including Barrhaven there are 17 choices comparable to their home, some large, in better locations and with larger yards.  Their house sale is not the slam dunk it seems to be…adjusting the price to make their home more competitive results in a contract 5 days later.

That is why and how Price Matters when selling your home, it matters what has sold that’s like yours, it matters what the housing market is doing and it really matters what other choices a buyer has.

Do you have a real estate question?  Ask HomeTeamOttawa.com your Ottawa real estate questions.

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