Home selling can be its own ordeal, with getting your property market-ready, to dealing with showings and likely a bit of anxiety over if it will sell and for how much. We’ve talked a bit before about The Process of Selling For The First Time , and now we’re going to cover the How of getting it done efficiently and with your NET profit as top priority.
Generally one expects to put their home on MLS and pray that it sells. While you can do that, depending on your goals your agent can help you get clever.
Today, let’s cover the 5 main selling strategies when selling your home.
Price Low, Sell High
This is for the daring. Home prices continue to rise year-over-year and nobody wants to turn down a bargain. If you saw a home going for even $50,000 under market value, you would probably take a second glance, right? That $50,000 is even more in taxes and interest, so any savings is worth paying attention to when buying a home. And when the market is in such high demand as Toronto’s, you can bet there are bargain hunters looking for that perfect price. Well, that’s just how Price Low, Sell High works.
By intentionally under pricing your home or condo, you’ll be shooting to the top of the list of buyers all over the GTA. If you pique interest in the most potential buyers as possible, people will start bidding on what they perceive is an excellent value, and if they feel committed or that the home is ideal, they may even go over market value just to lock it down.
It’s like an Auction. You want to start a bidding war to create the opportunity to obtain the highest price possible, thanks to people’s natural desire to get what they want. But this is also a dual edged sword.
If you’ve spent any time on Ebay, you’ll notice there’s often auctions for items that just don’t get bids at all, which is likely because similar or the same products are readily available for a fixed, appropriate price (market value), or the item isn’t rare enough to justify over-spending. So if your home isn’t all that special, it’s going to be hard to get someone to offer above the market price or get a bidding war started.
In the end, all you need is one strong offer from a competent agent that understands the market and multiple offer process (coming in with a clean, unconditional offer with bank draft in-hand) to achieve the intended result which is, a quick sale of your home for a strong price. And, creating the opportunity to drive-up the price by having a few agents work with their clients to secure the property is the clear objective of the price low, sell high strategy.
Because the real estate market is relatively self-regulated and constantly growing, there are clear avenues (appraisals, sales history, market reports) and your agent’s expertise in analyzing the data to understand the value of your home. A competent agent should be able to ballpark a pretty good price that reflects the neighbourhood, features and amenities of your home accurately. This price you come down too is called Market Value. We don’t pick the price for homes ourselves. We price what people are willing to pay in today’s market. That’s why we have strategies at all – because sometimes we need to do a bit of finessing to get a more desirable price.
At times sellers do not want to play the ‘game’ of real estate and would prefer to tell it like it is – pricing at market value and finding a straight-shooting buyer to work with. If you want to set clear expectations for buyers and are OK with a conditional offer, gunning for market value is a workable sales strategy. Some buyers don’t want to involve themselves in the multiple offer process and pricing at market value would capture the buyer pool that is likely to offer appropriate value for the property. So going with Market Value puts you right into the window of being worth considering for those that understand market value and can see past the price low sell high sales tactics; just don’t necessarily expect to get more than what it’s worth. That being said, with the prices in the city as high as they are, this could be a good option for you.
This one’s for the risk takers that feel like they have the advantage. Generally an overpriced listing denotes 1 of 3 things:
- the seller is testing the market and willing to wait for someone to come along and pay their price,
- the seller is aiming high expecting someone to come in-range of market value or slightly above thinking they’d have gotten ‘a deal’ for buying below-asking,
- or, the agent has not done an adequate assessment of the market and has overpriced the property.
If it’s one of the first two, you are in a market with high demand and low supply, you hold the cards so to speak, and in such a market you can bring your price up if you’ve done your due diligence elsewhere (staging, marketing etc.).
This isn’t fool proof though. You might find yourself in the last category. Although you have an advantage, overpricing can put you right out of the market where buyers won’t even consider your property because it doesn’t show value. Generally, you can expect shoppers to be weary of over-priced listings. They’re going to be looking at plenty of properties in their search and choose the homes that have the most features for the best value (see strategy one: price low, sell high). So it’s important to keep this in-mind if you want to turn a healthy profit. It takes a few variables falling in your favour for this strategy to deliver.
Maybe you tried one strategy and it did not provide the intended results – you can of course change the price of your home. Price Changing shows the market you are motivated and likely willing to negotiate. Ensure you are watching the market however. Price changing too quickly may give away a bit of value to someone who could have paid the original amount with just a bit more time on the market. It’s important to assess feedback, number of showings, average days-on-market and overall market dynamics before making the decision to price change. Not receiving offers can nag at us and our impatience, but we need to be able to determine when it’s a problem of time (we’re priced right but we haven’t got the offers we wanted) vs. a problem of price (we’re priced too high and nobody is making offers).
So it didn’t go. Maybe your expectations from when you bought vary from the current market reality. Re-listing enables your property to show up again as the hot new product. If a new buyer comes along that didn’t see the previous listing, either because they just started their search, or it was previously priced above their price-bracket on MLS, they won’t immediately know it’s been re-listed and ideally they’ll get wrapped up in the ‘new release’ excitement. Additionally, if buyers had seen the property before and were turned off by the price, re-listing (similar to price changing) demonstrates the seller understands the market and is motivated to ‘play ball’ and sell.
A note of caution: if the property shows up too often, people may start thinking it can’t sell and there might be something wrong with it. This can make it progressively harder to sell, be that in the form of lowball offers, or no offers at all.
You have lots of options when it comes to selling, no matter your risk aversion or patience level. For those in a rush, you can get lots of offers really quick with some clever pricing, and it may even pay off with a higher offer than originally planned. For those with time-on-their-hands, you can get your asking, if you’ve done your due diligence and priced your home properly.
All these strategies have their own little caveats so proper planning and understanding of your own home is key. This is where your agent comes in, so don’t be afraid to ask for help.
Written by: Sarah Miskelly – Lead Sales Representative
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