What NOT TO DO When Listing Your Home for Sale
Canadian real estate is showing signs of settling down after a rollercoaster couple of years. The Bank of Canada is doing its bit by cutting down interest rates while the government is introducing fiscal measures that are aimed at making homes more affordable. Or, at least, making mortgages more affordable.
With the Fall season in full swing, and buyers finally coming out of their self-imposed hibernation, this may be a good time to finally bite the bullet and put up your home for sale. You can opt to do it yourself (For Sale By Owner – FSBO) if you do not wish to consult a Realtor. Or you can leave it to the professionals to help you sell the property.
In either case, there are quite a few steps that you need to bear in mind during the process. And one of the most critical is getting the listing price right.
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What is the listing price?
If this is your question, then let’s start by explaining a little bit more about the MLS and listing prices.
Canadian Real Estate and the agencies thereof (CREA, BCREA, TRREB, etc.) use a database of properties on sale throughout the country. This is essentially a virtual marketplace of properties, collated by real estate brokers.
Known as the Multiple Listing Service (MLS), this system allows real estate agents a safe space to cooperate and share property listings, helping them find buyers or sellers for their clients. Details of listed properties such as location, address, size, age, etc. are shared on the MLS, helping buyers look up ‘for sale’ properties and compare them. Similarly, sellers can access information about the pricing of comparable properties.
MLS® is a registered trademark owned by the Canadian Real Estate Association (CREA). Multiple MLS systems are available and can be accessed by real estate professionals for a fee. The general public can view the listed properties for free though some of the information, including the private details of the seller, is hidden.
The price at which you list your home is the Listing Price.
There is no underplaying the fact that setting the right listing price is a critical step in selling your home. It has a strong impact on how quickly your property sells and the final sale price. Homeowners and some real estate agents may face challenges in setting the right price, leading to missed opportunities or extended time on the market.
Here’s how to avoid common errors and set an effective listing price.
The right listing price is almost a mythical number – it is a nuanced process that takes several factors into consideration. Obviously, the condition and size of your property is one of them. However, other things beyond your immediate influence have a greater impact.
You must have an understanding of the local market trends and happenings. Some things to keep an eye on:
Ignore Supply and Demand Dynamics:
Like every other industry, the real estate market, and in turn, the prices, are influenced by supply and demand. If the demand for houses in an area is high while the supply is low, prices will rise – good news for sellers. On the other hand, a strong inventory of properties can mean that buyers will push for lower prices.
Do Not Pay Attention to Neighbourhood Trends:
Location is paramount in real estate and this adage holds good when selling your home, too.
Community highlights such as proximity to public transport, neighbourhood stability, crime rates, and vacancy levels can influence property values. Properties in areas with architectural interest or tourist attractions that attract footfall often fetch higher prices.
Family-friendly amenities such as schools, parks and sports facilities in the vicinity can easily add a few thousand to the listing price.
Disregard Economic Factors:
Beyond the hyper-local community, economic trends, job availability, population growth, and educational levels also impact the local market. The industry’s inherent cycles—recovery, expansion, hyper-supply, and recession—will affect the optimal listing price too.
Art and Science?
Home valuation is a combination of both – there is a derived value as well as a perception that adds up to the final listing price. However, there are a few tools and strategies that can help:
Comparative Market Analysis (CMA):
A CMA examines recent sales of comparable properties in your area, helping set a realistic price based on current market conditions.
Professional Appraisals:
Certified appraisers provide an unbiased and realistic evaluation of your property’s worth, taking into account location, property size, structural features, and local market trends.
Online Valuation Tools:
Though some of these tools lack personalized assessments, they are helpful as a starting point. However, combining multiple methods will give you a nearly-accurate price.
Pricing Strategies You Can Adopt
Once you have a fair idea of what your home is worth and the local market trends, it is time to derive a fair price. Pay heed to these strategies.
Competitive Pricing:
Setting a competitive price based on a thorough CMA helps attract buyers and avoid prolonged time on the market.
Value-Added Features:
Unique features like smart technology or luxury finishes can justify a higher price point, setting your property apart in the market.
Timing the Market:
Seasonal trends and local market conditions can influence your selling strategy. While spring is often the best time to sell, understanding local trends can help maximize returns.
Detaching from Sentimental Value:
Emotional attachments can lead sellers to overprice their homes. It’s essential to focus on market realities and trust professional advice to avoid this common pitfall.
And That’s It!
Setting the right listing price is not rocket science and you can do it.
However, it involves understanding the local market, employing effective pricing strategies, and remaining objective. By avoiding these common mistakes and consulting real estate professionals whenever necessary, you can position your home to attract buyers.
Here’s to a quick sale at the best price you hoped for!
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