Determining the Sale Price
Few people would deny that the most important factor a Vancouver homeowner must consider when selling their home is the “asking price.” Pricing your home means striking a balance — to place yourself in a position to not only receive solid offers but also top dollar for your Vancouver home.
If you price your home correctly, depending on the state of the Vancouver real estate market, you can receive multiple competing offers and realize a higher final purchase price. Fair market value consists in the highest price an informed homebuyer would pay for the home.
Do not confuse the fair-market value of your home with the asking price because the terms have different meanings.
Obtain a free competitive market analysis (CMA) offered by many Vancouver real estate agents. The (CMA) provides a fair market estimate of the home’s value. The evaluation provides you with a range of home values. You will learn what similar homes in your neighbourhood sell for considering the current real estate market.
The Comparative Market Analysis Process
The agent starts by pulling comparable listings and sales for your Vancouver neighbourhood.
Usually, these transactions have occurred over the last six months. The list should only contain homes within a radius of ¼ to ½ a mile. The agent must adhere to boundaries such as neighbourhood dividing lines, railroads, freeways, and other markers.
The list must only include homes that have similar construction, age, and square footage (within 10 per cent) to your home. The comparables must also have the same number of bedrooms and bathrooms.
For cases where a shortage of comparables to your property exists, the agent may extend the boundaries to include transactions in adjoining Vancouver areas.
The analysis includes a category called “sold comparables” that helps you to compare list prices with final sales prices. You can also gain insights into price reductions during the sale process. You can also compare final sales price to actual sold price.
Appraisers use this information to assist in adjusting prices for lot size variances, amenities upgrades, and other items.
This group of properties reveals what properties you compete with in the neighbourhood. This information should not have a bearing on your price because sellers have different motivations for arriving at their particular price. You might want to tour these homes to ascertain what Vancouver home buyers see when they enter the homes of your competition. Pay particular attention to the curb appeal and areas like kitchens and bathrooms.
By sizing up your competition, you can determine why buyers might prefer a certain property to your home. Armed with more information about your statement of the Vancouver real estate marketplace, decide whether to make improvements or adjust your price.
Expired and Withdrawn Listings
Examining this category may reveal why a home did not sell or identify a pattern of expired listing with a particular listing agent/broker, or other information. You can also determine if the homes remained permanently off the market or re-listed. Employ the information you learn to avoid mistakes.
Pricing Your Home to Sell
If you price your home correctly, it increases the probability of your home selling within the prevailing “average number of days on the market,” such as 14 days. In a seller’s market, it can work to your benefit to overprice the property since theoretically the marketplace has more active buyers than properties available.
Pricing your home too high ends up being nonproductive. When setting your price, avoid the sort of thinking that leads to overpricing. This includes:
◾Moving to a more expensive property
◾“I paid too much at the original purchase”
◾A need to find extra money for other uses
◾Recouping the cost of personal upgrades
◾“I had better build in some negotiating room”
This aspect of selling your home really requires you to work closely with your listing agent to determine the best price level. Setting a price more than 1 to 3 per cent over the fair market value can compromise your bargaining power.
Overpricing your home compared to similar properties in the neighbourhood listed at fair market value reduces the amount of traffic you will receive. In addition, your home will lose its appeal after the first couple of weeks.
If you price the home too low, depending on the market, you will probably receive numerous offers. This could mean that you receive more than the asking price.
After gathering all the necessary data, evaluate the information with your agent and decide on a pricing strategy.
For example, if the data shows the last three comparable sales were $200,000, you might want to add an additional 10 per cent to your asking price in a seller’s market.
In a buyer’s market, you might price your home at $198,500. This approach could give you an edge in the competition for buyers’ attention. The lower price entices more “bargain hunters” to tour your home and can result in a quick sale.
When the Vancouver Real Estate Market Favours Buyers
In a buyer’s market, it is common to have price reductions because sellers entertain fewer offers. This environment can also increase the market time to sell your home. Buyers have the upper hand, and they understand this.
Expect to receive offers significantly lower than your asking price. Smart buyers will not hesitate to ask sellers to put in new appliance, help with the closing costs, or provide some other “sweetener” to consummate a sale.