NOT SURE HOW TO PRICE YOUR HOME? AVOID MISTAKES WITH THESE TIPS
What is “fair market value” and how do I determine it for my condo?
Simply put, the fair market value of a home is the highest price an informed buyer will pay for it, assuming there is no unusual pressure to complete the purchase. It usually is not the asking price.
To get an estimate of fair market value, call your real estate agent and ask for a Comparative Market Analysis (CMA) of your home. Most agents will provide this service free of any charge or obligation.
The analysis will give you a realistic price for your home based on the most salient points of the local real estate market. It should provide information about recent sales of homes like yours, including how much they sold for and how long they took to sell. The agent’s price opinion should be very helpful to determine the right listing price.
What’s the difference between fair market value and listing price?
Generally speaking, the owner’s listing price is the advertised price of a condominium when it goes on the market. Ideally, it is typically set a maximum of 3 to 5 percent higher than the fair market value.
You can assume that some negotiation will be necessary to reach an agreement with a buyer. However, a home priced too high above fair market value will not get many showings and usually will receive only “bottom-fishing” offers.
Sold Over Asking… what does that mean?
In the last few years we’ve seen a lot of that happening and it’s all manufactured. For the most part, properties are still selling for market value BUT sellers and listing agents are actually listing homes at many tens of thousands of dollars below market value initially in the hopes of generating multiple offers.
For this strategy to work, two things must happen. First, the list price must be at least 10% to 20% below market value to generate that ‘bidding war’ interest. Second, there must be a set offer date that is most often one week after the listing hits the MLS.
Sellers will commonly list their home on MLS on perhaps a Tuesday and then hold off offers until the following Tuesday evening when they’ll review any and all offers.
Sometimes one particular buyer will be very aggressive and want to present an offer prior to that set offer date. The seller has the option to review this ‘bully offer’ but other agents who’ve shown your home need to be notified of this offer date change.
There are positives and negatives to this strategy… we can discuss them at a Seller Consultation.
Who can help me determine the right asking price?
Real estate sales agents suggest asking prices for homes based on a variety of information you may not have at your disposal, including recent listing and selling prices of comparably sized condos in your building.
Next, establish clear priorities. If you had to choose, are you more concerned with selling your home quickly, or getting the most money possible? Do you think the agent’s suggested listing price is reasonable? What would YOU pay for the suite if you were the buyer?
Someone else - a neighbour, friend or relative - may point out advantages or disadvantages about your condo that you hadn’t considered. Third-party views will help you start to think of your home as a commodity with positive and negative selling points.
Then you should decide upon a price that you feel is competitive and consistent with sales of other homes in your area. Toronto’s Real Estate Team suggests that YOU select the listing price for your home.
Why shouldn’t I ask an outrageous price for my condominium and see if anyone makes an offer?
The biggest impression and most impact a property makes upon buyers and agents is in the first few days or weeks of the listing.
Therefore, the home should be priced correctly and be in ‘ready to show’ condition from the beginning. Pricing your home accurately is essential!
Typical benefits of proper pricing:
- Faster sale
- Less inconvenience to sellers and their family
- Exposure to more prospects because more showings take place
- Increased Realtor response, which generates greater urgency
- Better response from your listing agent’s marketing and promotional efforts, which generate more calls from everywhere
- Attracts more offers and sometimes competitive offers
- Means more money for the sellers.
How flexible should I be about the asking price?
Most buyers also leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and the seller.
That 3 to 5 percent window for the listing price above the market value range is always best!
While it is ultimately your decision to accept, or reject an offer for your home, or to present a counter proposal, a good experienced listing agent can be of great assistance to you during the negotiating process.
In fact, negotiation is one of the most valuable skills an agent can offer you. As negotiations proceed -whether in writing, face-to-face, by email or over the phone, your agent should advise you of your options.
Even without such advice, keeping a cool, rational mind-set in what can sometimes be a long, emotionally charged process will usually net you a significantly higher price.
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If you are going to sell your suite in the next 1 to 9 months, what you do right now can make a difference of thousands of dollars in your sale price, and there are some simple things you can do forthwith to make sure you get "Top-Dollar" when you do sell.
HERE ARE 3 FREE SERVICES YOU MAY WANT TO TAKE ADVANTAGE OF RIGHT NOW
First, is our FREE "Pin-Point Price" Analysis, where I can take a closer in-person look at your condo and prepare a very specific price for your suite. This price will be much more precise than the general range that you can get automatically from the site - and we guarantee in writing to sell your condo at the "Pin-Point Price" or higher in less than 32-days.
Second, is our FREE "Room-By-Room Review", where I do a 20-minute walk-thru and make specific recommendations about which fix-ups or improvements you should (and should not) do to prepare your suite for sale. I will point out the lowest cost, highest return improvements you can make to help sell your condominium quickly and for more money.
Third, if you would like, I will include your condo in our "Silent Market" of condominiums that are not yet on the market. Because we generate so much buyer interest from our website, Facebook and Google advertising and other proactive marketing, we may be able to find a buyer for your condo without even putting it on the market… saving you both time and money.
These 3 services are FREE. The Room-By-Room Review takes about an 20 minutes, and we can arrange a time during the day or evening, whenever is most convenient for you.