Kim Mullan Blog
Are you Priced for Business or Rolling the Dice?
ARE YOU PRICED FOR BUSINESS or ROLLING THE DICE?
There are many reasons people decide to sell a home including relocation, upsizing & “right-sizing”.
When it comes time to price your property for the market several factors come into play.
1- What are the market conditions?
2- How much inventory am I competing with?
3- How many projects will buyers perceive in my home?
4- Are my finishes still popular?
5- How is my layout? Do I have any challenges that might be deal breakers?
6- How is my lot? Does the size and shape allow future owners flexibility of use or will it be a compromise for them?
7- How is my location? In the city? In the neighbourhood? On the road?
8- What were recent buyers willing to pay for properties similar to mine?
9- What is my motivation for selling? Is timing a factor?
10- Does the perceived value of my home depend on seasonal factors?
After we discuss the facts of the property we need to discuss pricing models.
a. If time is of the essence or your segment of the market is slow or saturated with inventory pricing on the low side may drive traffic and create fear of loss helping secure a closing that is important to you or a faster sale.
a. What makes sense based on recent comparables after adding and subtracting for your strengths and weaknesses? This model is only effective provided sellers are willing to respond quicky to the fluidity of the market, the flux in inventory and the patterns of responses they are getting from buyers who are dismissing them.
a. This is largely magical thinking and often reflects
i. A subjective emotional response to the property based on memories, experiences and personal taste.
ii. The dollar for dollar cost for all upgrades, décor choices + every hosta + tulip bulbs + a healthy appreciation based on the most robust market in North America (certainly not your own) plus all fees incurred selling the property minus any depreciation for wear and tear, lack of popular finishes, functional obsolescence or any consideration for market conditions.
b. The risk with this model is that
i. You are waiting for your design doppelganger to arrive and announce that they would have made all the identical choices for all the same costs (these people are like mermaids or in Canada...the elusive Ogopogo. As a child of the Okanagan Valley I can tell you I'm skeptical)
ii. The longer this property sits the less consumer confidence it evokes to the point where the price no longer has to be adjusted to it’s probable value but, in fact, must now be reduced below probable value to compensate for lack of consumer confidence.
More reasons why it’s critical to follow the guidance of an experienced Realtor when you are considering the sale of your home. Let’s Talk…