Choosing the right price to sell your home for is one of the biggest decisions that you can make when selling property. Although this may seem like a straightforward task, there are a multitude of factors that can influence the true real estate price of any property.
There are risks inherent in both overvaluing and undervaluing a property, both of which could alienate potential buyers. If a house is overpriced and sits on the market for too long, this can result in a loss of interest in buyers who may think there's something wrong with the property. By contrast, pricing the house too low could leave you with less money than your property's worth. Yet this could also potentially work out in your favour, should the initial low price attract more offers and drive up the price towards its true value.
It's important to have a professional evaluate your situation to determine what a good starting price range would be for your property. By choosing a local real estate agent using the comparison tool at sellmycastle.com.au, you can find a professional who knows the ins and outs of your region and can help you set a fair price. House prices are dependent on the simple economic principle of supply and demand, which makes it vital to strike the correct balance. You can register your details here to get started.
As you and your agent work together to find a realistic and economically viable price, there are several sets of data to work with.
Similar Listings and Recently Sold Properties
One of the first indicators that will help you reach a realistic selling price for your home is the price of similar homes in your local area. This is why it's a good idea to choose a local real estate agent to work with, because they will have the best knowledge and access to local listings. You'll want to look at the immediate vicinity surrounding your home. Your agent can draw up a list of all the properties currently for sale and those that have sold in the past six months within a kilometre of your home.
Location plays a large role in a home's perceived value. Particularly in urban areas, simply crossing a street can make a world of difference in atmosphere, crime statistics, and corresponding home value. Certain suburb names may carry positive associations and an air of prestige, which could make homes much more valuable due to this association alone.
Size will also determine what makes a comparable home. Your agent will look at the prices of houses that have similar dimensions and square metres of space, as well as those built in the same era as your home. It's not uncommon for a single neighbourhood to have homes built 100 years ago alongside modern developments, both of which will carry different price points. These are all relevant factors that you and your real estate agent must take into consideration in order to compare your home to similar properties. A good agent will be able to take care of this research for you and then explain how it is relevant to your own pricing needs.
Expired and Withdrawn Properties
Another type of comparison to make is between your property and real estate listings that have expired or were withdrawn. In addition to current listings and recent sales, your agent will have access to a database of properties that were eventually relisted or withdrawn. This information can be used to see how long a property spent on the market. It's also possible to compare the original house price with the final sale price, to see how and at what point any price deductions took place. As with current listings, your agent will also use factors such as amenities, location, size, and age as reference points to see how these properties compare to your own.
If a property was withdrawn or expired and was never relisted, it's helpful to take a closer look at why these didn't sell. This could be due to the real estate agent not putting enough effort into marketing, or it could be to other economic factors. These listings can be used as cautionary tales, to help you avoid the same mistakes and sell your property quickly.
Houses Listed as Pending
If a house is listed as pending, this means that the sale has not yet been finalized although the transaction is in process. The true final sale price is not yet known, but it's still possible to contact the real estate agents associated with these properties to get an idea of what this may be. You may have better results with this if you have your own estate agent contact the other agents, using professional connections. This information can then be useful for your own pricing needs. As with other properties, it's important to bear in mind how long these pending homes have been on the market and whether they have reduced their price along the way. This could give you some idea of your own chances of success.
Comparing Current Competition
If you're getting ready to list your home and start showing it to potential buyers, it can be helpful to tour a few comparable properties in your neighbourhood. Take listed prices with a grain of salt, because these have been created by each individual seller. They could create any arbitrary price, but that doesn't mean that this will end up being the final sale price. Visiting these homes can be useful because it allows you to compare atmospheres and staging. If you see something you like about their approach, you can speak to your own agent about replicating this in your own marketing strategy.
Comparing Square Metres
As part of the selling process, your home will be subject to an appraisal by the buyer's lender. It's important to have your own accurate measurements before you set a price. Valuations with other properties are done within 10% of the net square metre calculations. This means that if your unit is 100 square metres, it could be compared with real estate prices for properties that are 90-110 metres. Any deviations greater than 25% will not be accurate and tend to be frowned upon. The price per square metre measurement will also vary depending on your house's size. Larger properties have a lower square metre value, while smaller homes will have a higher price per square metre. This is a general rule, but there are many other factors that will affect the price aside from size.
Taking Market Conditions into Account
The current state of the housing market is also important to take into consideration. One property could have several different potential prices depending on whether you are selling in a neutral, buyer's, or seller's market. If you are comparing agents using the comparison service at sellmycastle.com.au, be sure to choose one who is up to date with current market analysis. Your real estate agent will help provide you with a great deal of data, which can then be analysed using these current market conditions.
If you are selling in a buyer's market, there is still room for negotiation. It may be helpful to advertise the home for a bit less than what you would in a neutral market, but take care not to dip too low. This sale price may entice buyers into making an offer but it should not force you to settle for too much less than what your property is really worth. In a seller's market, there is high demand from buyers. You may decide to add 10% on to the house price, using recently sold homes as a comparison. A neutral market usually calls for advertising the home at its market value, using the data described above as a guide.
Following market fluctuations on a general and local level can be time-consuming and confusing, which is why it's best to consult with a professional who has made this their career. Your real estate agent cannot dictate what price you choose for your home, but they can provide useful information to help you make a more informed and reasonable decision.
You can get started with your search for a knowledgeable real estate agent by comparing proposals at sellmycastle.com.au. Register now to compare agents and find the individual or franchise that will best represent your needs with a strong working knowledge of the intricacies of your market. This will help you set a realistic price that garners you the maximum profit when it comes time to sell your property.
You can also read on to learn more about pricing houses and selling property: