As we explored in Part 1, you can make the most costly and time-consuming mistake when selling your home based on an overpriced appraisal. It is not simply that you won’t get as many offers, but it could cost more than if you had priced correctly in the first place. Read on to find out why this is and how to settle on the correct price before going to market.
Ultimately, the longer your property remains on the market, the more potential buyers suspect there is a reason that no one is biting. With all significant platforms such as www.domain.com.au and www.realestate.com.au displaying the ‘total days listed’ clearly for all to see, you will have to decide whether to ‘wait it out’ or reduce the sale advertised sale price, thereby publicly accepting it was overpriced to begin with. Once you come to terms with this, you will need to consider reducing the price to reflect the market value and a further reduction to entice people to look at it again.
So now we get to the delicate conversation that needs to be had. What matters most is the current market and what the buyer is willing to pay. If you overprice your home, it won’t sell, or it will take a very long time to. If you underprice your home, it is guaranteed to sell faster than you ever imagined! But neither of these is a desirable outcome. Instead, you need to assess the actual value of the home.
An experienced and professional real estate agent won’t try and entice you with unrealistic property appraisals. Instead, they will rely on their in-depth local area knowledge and data from recent property sales to assess what buyers are paying for properties like yours in the current market.
An accurate appraisal is more than just finding out what other homes have sold for. Your agent should look for similar homes that have sold locally and adjust for differences in features, amenities, and lifestyle factors. If your home is similar to the neighbours that just sold but has a more extensive garden or includes a pool, then you should expect a higher sales price. Positioning, aspect, and features all play a role in the final pricing. By pricing accurately like this, your agent is better armed to make a successful sale on your behalf. Whether or not you go to auction or private treaty, your agent can point to other properties that have sold in the area to justify the asking price and to empower them in any price negotiations.
The final major element of this comparative market analysis is determining the supply and demand level for similar properties in your area. If there are no other homes in the area for sale, there will be more competition for yours, and you should price accordingly. However, if there are many similar properties on the market, you may need to adjust accordingly.
Avoid going with an agent simply because they have claimed the highest quoted sales price. An overpriced home can lead to your property being advertised for months and months. This makes the entire process more costly and stressful, putting off other high-quality buyers and offers. More often than not, this leads to you getting jaded with the sales process, where you eventually settle on a less-than-favourable offer just to get it done.
Instead, get an appraisal from a real estate agency with deep local insights into the specific area of your property. It is also a great way to get a feel for the team, see how they operate and ask any general questions you have.
If you’re keen to know a solid guide price based on the market climate today, reach out to Mercer & Cooper today.
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