SHARP HOME

Monday, 24 September 2012

Your property: priced to sell


Are you in the position of getting ready to sell your property? If so, then chances are you fall into one of two categories: those who don't have much choice (owing to factors such as job transfers and other such obligations) and those who have somewhat of a choice (with your reasons for selling being along the lines of wanting to change neighbourhoods, or a desire to upgrade or downsize the home you live in). At any rate, your top two goals in selling your house will be: to get the best price that you can, and to sell as quickly as possible. The two are somewhat linked as well. The longer your house stays on the market, the less desirable it will seem, which will lead to lower offers. Thus it follows that in order to sell your house at a good price, you need to sell fast.
One piece of advice that real estate agents are giving to reduce the gap between “for sale” and “sold” is difficult for most home sellers to receive because it seems to go against the desire to get a good price: agents are now recommending that serious home sellers price their homes at 15% less than the market value right from the get go. On the surface, this advice seems unappealing for a few reasons. One objection is that—assuming the house is sold at the asking price of 15% below its market value—it means throwing away 15% of the money you would have had. Another objection is related to the negotiation aspect of selling a home: if the starting point is 15% lower than the home's actual value, doesn't it follow that once all of the offers and counter offers have been made, that the final figure will be even lower than that?
It turns out that these objections—while completely understandable—are actually based in oversimplifications. To begin with, when you place your property on the market at 15% lower than its actual value, you can very quickly weed out absurdly low bidders. Because your offer is so good, it is definitely within your bounds to say that this is a firm price. This will save your time, and the potential buyer's time as well, which will give your property appeal.
Secondly, pricing a house at 15% below market value does not necessarily mean you are throwing away 15% of your revenue: if you begin by pricing your property at its full market value, you are likely to part with a sum just as much by the time the process of negotiation is complete. Moreover, low opening bids actually stimulate buyers' interest, and when you excite several buyers at once, you are likely to have many enthusiastic bidders who may very well end up in competition for the highest bid. If this happens, you may not only recover the 15% you sacrificed, you might exceed it as well.

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