To Sell? YES! But at what price?
The eternal debate between the seller who wants to sell for more and the buyer who wants to buy at the lowest possible price.
Some owners set the selling price as follows:
I bought at X$ in 2002 and I paid the legal fees for Y$ (rounded up), then I did some work for Z$. If I add up all that and add inflation, plus a small profit, it gives the price I ask (again rounded up).
As buyers like to negotiate, I will add another 20 or 30% and who knows, if I have any luck ...!
The buyer makes another calculation:
If seller asks X$ for home, I must add legal fees, therefore, in reality, it's going to cost me X $ +1
The house is not very fresh, repainting, wallpapering and installing a suitable kitchen will cost another $ X +2.
The garden shed they built is really lame, it will still cost me $ X +3 to remove it. I already have so much and I can borrow up to so much. If I take these added expenses into account the amount I am able/willing to offer is X$ - 3
The seller seems to be in a hurry and the house has been listed for a while now, I'll offer 10 or 20% less. You never know!
So how to determine the true value of the property?
The price of homes sold recently in the region are actually a very good approach. To get an idea of the market, ask about other properties like yours that are for sale in your area by visiting the websites of properties, such as www.mls.ca
In addition, you can call a certified appraiser. Experts may give very different values depending on the expert and one who seeks the expertise. Two identical homes built on very different lands will generally fetch different price tags.
We must therefore define a specific task for the evaluator by specifying the objective of the evaluation and asking him or her to include in the report, points of comparison.
Finally, it is essential to take into account the state and the overall appearance of the property.
How to set the ideal price?
1- We want to sell the property but there is time, we are in no hurry.
We can advertise the property at market price or slightly higher.
2- We need to sell quickly, time is of the essence.
It is better to advertise the property at a price slightly lower to most comparable properties in your region.
3- We want to lose a lot of time and money.
We set the property at a price far above its fair value by saying there will always be time to negotiate with potential buyers. Potential buyers are there but get discouraged by the high price and do not even attempt to negotiate. They buy another property at a more realistic price. Time passes.
We then become anxious to sell and resort to several price reductions. Potential buyers recognize the house and say, "If it is for sale for so long there must be a problem."
The house is then black listed (so to speak) in its market. It will eventually sell, but at what price? The price will be considerably lower than the owner’s initial expectations.
To sell quickly and efficiently, it is of utmost importance to establish at the outset, the price realistically.
Justify that price and keep it as it is justified.