One Of The Most Frequent Questions You Ask Me
Wednesday Nov 13th, 2019Share
Q: As a Real Estate Agent I'm always asked: Why shouldn’t we list at the price we want and then reduce it to your price if our property doesn’t sell?
A: Being an expert Toronto Real Estate Agent, my goal is to sell your home for the most amount of money the real estate market will allow. And I also want to ensure that the highest sale is in the shortest period of time and causing you the least amount of inconvenience.
I want you to net, in your pocket, as many real estate dollars as possible, however your home is always subject to current real estate marketplace economic conditions. How I price your home directly impacts how many Buyers come to see it and consider buying it. If I price it at the correct market value then more serious prospective Buyers will do that because Buyers shop real estate within their price range. In Toronto’s current real estate market, it’s imperative that I price your home accurately and not overprice it. Our asking price must reflect the accuracy of what Buyers likely already know and are advised by their own Real Estate Agents who will show them how current homes sales compare to yours. The research will show: what's currently on the market that compares or doesn't compare to yours? What are the major differences? What has just sold around you (in the last few months)? How long did the home(s) stay on the market and can we determine why? Were price reductions necessary and how many were there? Did any sell for more than the list price?
With over 18 years experience, I know that pricing your home, even 10% higher than today’s optimum market value, can reduce potential Buyers by as much as 50%. Your home won’t generate as many interested Buyers because they think it’s out of their and the market’s price range. In short, they and their agents aren’t interested because it’s overpriced. Buyers are very savvy and knowledgeable about real estate prices and value these days. It will take a much longer time to sell your home and could impact on your timing for when/where you are planning to move. It also tends to make other competing properties look good and can even, inadvertently, sell the other available homes. We want to be as accurate as possible with our listing price. We can then maintain confidence in that price as we review any offers and negotiate to reach as close to the listing price, as ultimately possible. We don’t ever want to have to reduce the price because we’ve been unrealistic. I even take my Sellers on a 'showing' journey, and we visit all the current listings together to know what we're comparing ourselves to. It's revelationary, my clients say and are so grateful we conduct this exercise.
Of course, though, there's the question of : Do we price it lower than we want and hold back offers until a specific date to try and create multiple offers (aka 'bidding war') ? The answer to this isn't cut and dry. There are quite a few factors to take into consideration: location of your home, school district, proximity to public transportation, how much work does your home really need (just a bit of updating, a total renovation or is it in showcase condition), do we need to do some or total staging, how long will it take you to get your home into ready-to-sell condition and does this impact on the timing of when we can list it, is it a Seller's or a Buyer's market not only in your area and but, in general, what are the market conditions, when do you need to close on the sale (are we starting to look for your next home, have we already purchased something or what are our next steps?). The list goes on.... seriously!
No matter what we choose as our 'strategy', the first 2 weeks, your home is listed, are the most crucial. A home attracts the most interest in the real estate community and among potential Buyers during the first 7 – 14 days. Even if, and when, we’re setting an offer date to encourage multiple Buyers, if your home is not priced correctly, it remains on the market much longer and it will become “stale”. This is the last thing we want to happen. So I'm honest and upfront with you about realistic real estate selling price expectations. If we list your home at your price and it doesn’t sell, how many days will pass before you make a price adjustment? And, by then, what’s been the risk and damage having lost qualified Buyers’ and Real Estate Agents’ interest - except to either wait, watch and see how much we reduce the price or whether they'd try a very unwelcome offer that is decidely lower than the market value of your home but raises your stress level higher than it ever needs to be.