Pricing a home for sale is probably one of the most important aspects of selling a property.
If it’s priced too high, it languishes with few people showing any interest in being potential homebuyers.
If priced too low, sellers could be out thousands of dollars they could have pocketed.
And let’s face it, buying a home is likely to be the biggest investment you will make in your lifetime. So if you’re selling that investment, it makes sense you’ll want to squeeze out as much as you possibly can.
In this day and age, the correct pricing of a home is critical in the selling process. While market trends and research are a majority factor, gut feelings, instinct and experience also play a role in what a REALTOR® comes up with as a list price.
Christina Hagerty, a salesperson and REALTOR® in Calgary with RE/MAX Realty Professionals, says the first key thing in selling a home is being represented by a REALTOR®.
Only REALTORS® are members of real estate boards and associations and have access to MLS® Systems. Access to an MLS® System, including active listings and historical information, as well at a network of other REALTORS® with buyers looking for houses, is a benefit to any home seller. As a consumer, if you’re trying to price your own property, you likely have an emotional attachment to the home meaning you might not have an objective perspective. Usually, people think their property is worth more than it actually is.
Number one: A REALTOR® brings an unbiased approach
This means a numbers-driven, common sense and calibration approach to identify the value of a specific home.
“A REALTOR® brings a realistic view. For myself, stepping into a listing appointment and talking to clients about how to list a home, there’s a bunch of factors,” says Hagerty. “One is obviously the merits of the house: the size of the home, the age, the look-and-feel and how it’s decorated. Not to mention how it presents itself and also what the market conditions are: what is the tone of the market? What is the media reporting?
“All sorts of variables. I take all those variables into play when I come to a market evaluation.”
A municipality’s assessed value of a home is also a good starting point but by no means does it represent the true value of a property in the current market conditions.
Number two: A REALTOR® has information you don’t
Since REALTORS® have access to board MLS® Systems, unlike real estate licensees who are not members of organized real estate, they will also look at comparable sales of homes and listing prices over a period of time in the same neighbourhoods. Hagerty says she also digs deeper and looks at expired listings (what listings, which have been terminated, tried to sell for but didn’t).
She also looks at 12 to 16 comparable properties to get a good indication of what a reasonable price would be for a listing.
Number three: a REALTOR® brings specific experience
“It is a science and part of it is also knowing how to judge. What is the value of something? I think that takes kind of a gut check. It’s not a written rule book,” explains Hagerty. “For example, how much would someone pay for high ceilings? How much is a single garage worth compared to a double? You kind of have to make different calibrations based on each specific area.”
There are so many nuances that a REALTOR® can help navigate. And the number of factors contemplated are exhaustive.
How does a specific neighbourhood fit into how a listing price is determined? What’s its reputation? What’s its crime rate? Where is it in relationship to the core of the city? What amenities – like shopping, schools and activities – are there? What does the neighbourhood and demographic data show? How close is it to transit?
“We take all of it into consideration,” adds Hagerty.
REALTORS® can look at these factors and, within a short period of time, come up with a list price they can present to a seller.
“There are different things we bring to the table just from our experience with the public to help determine how much a property is worth,” she says.
Thinking of pricing a home for sale? It’s a daunting task to do it on your own. REALTORS® are the MVPs of the home buying process.