The price is the most important factor affecting how quickly your house will sell. The price of your home should be based on the market value of homes similar to yours in your area. There are numerous ways to determine your asking price:
- Check out homes for sale in your area that are similar (in terms of size, features, yard, etc). Visit their open houses and collect their feature sheets. You can also compare your property to property listed on the MLS by visiting www.mls.ca.
- Free market analysis - most real estate agents will provide (for free - no obligation) a comparative market analysis to help you determine your price. Make sure it's free and with no obligation.
- Independent Appraisal - done by a professional real estate appraiser. The beauty of an independent appraisal is that you will have an objective measurement of the value of your property. It isn't your opinion, it's the opinion of a professional appraiser and that can be helpful in your advertising and during negotiations.
A home has the best chance of selling if the price is based on market value. Sometimes the seller determines their asking price by taking the price they paid (possibly when the market was high), adding in the amount of money they've spent on renovations/repairs and then adding in some room for movement. This kind of reasoning is not based on market value and can lead to overpricing. There can also be a temptation to purposely overprice your home on the chance that someone will buy it anyway. Problems that can result from overpricing are:
- Missed opportunity - It is normal for buyer interest to be high when a home first goes up for sale, potential buyers may move on to other homes
- Longer time to sell - not only can this be costly to the seller but potential buyers wonder why a house is on the market for so long
By doing your research up front you can also avoid the possibility of under pricing your home (especially in a hot market). In the end it is still your decision on the price - often tied directly to how anxious you are to sell.
When selling a home For Sale by Owner your competitive edge is that you don't need to pay real estate commission and can therefore offer your home at a price below what MLS real estate would. Be willing to share the commission savings with the buyer, they are shopping without the help of a real estate agent, ensure that they share in the savings.
Final Comments on Price:
The first month that your property is for sale is typically your best chance to sell - the interest level will be high because your listing is new. Your listing on OKHomeseller has a "New" status for the first 30 days to help maximize the exposure. It is important that you take advantage of that first month by making sure your property is properly priced.
The same reasoning is used by realtors when they list a property on the MLS - a property that has been for sale for an extended period of time can be seen as less attractive - potential buyers will ask themselves, "why has this property not sold?".
This "first month" rule doesn't apply in the same way to the more expensive properties, they typically take longer to sell because the number of potential buyers is lower.
Whether your property is in a high price range or a lower price range, you can still sell after 30 days - many do, but if you are keen on selling don't waste that first month with an overpriced listing.
Other things to consider:
- What are your deadlines (school, job, winter, etc)
- Determine a possession date
- Determine what's included in the price (fridge, stove, dishwasher, etc)
- Determine the minimum price you will accept for your home
- When determining your bottom line don't forget your closing costs