The answer is of vital importance to all property owners when determining what they should list their property for, or what offer to accept.
It’s surprising though, how few property owners know the answer to the question. Their lack of this knowledge usually ends up costing them a significant amount of money.
What’s even more frightening is how many estate agents lack the ability and skill to correctly advise a property seller.
So just how does pricing work? The truth is that estate agents don’t put the value on real estate – the Market does. The Market is made up of the buyers – and it is the buyers who will determine how much your property is worth.
How do buyers do this? They will value your property by comparing it to other similar properties they have seen For Sale, as well as other properties they know to be recently Sold.
When trying to determine what the Market Value of your property is, a professional estate agent will provide you with a Comparative Market Analysis. This will compare your home to other similar properties that are currently For Sale, and those that have recently sold.
But don’t be fooled! Many agents will just print you off an automated appraisal from one of the programs that accesses the Deeds Office data, without giving any thought to how the other properties really compare to yours. They may even include sales from as far back as 2009 – 2007, when we were in a totally different market.
Make sure you have accurate information of comparable properties. This comparison will give you and your agent accurate indicators as to what the current market value range is.
In many cases the facts will reflect a value lower than the value a property seller wants or needs. It’s an unfortunate reality of the market we are in. No amount of “agent talk” or wishful thinking will get a buyer to pay more than Market Value.
Property Sellers who price correctly right at the beginning of the selling process will sell more quickly than those who overprice. And properties that sell quickly sell for more than those that sit on the market for extended periods of time.
So, to achieve the maximum market value for your home you must:
•Obtain an accurate Comparative Market Analysis from a professional real estate agent
• Objectively determine the Market Value based on the facts
• List the property as closely as possible to the value, and sell in a short time for full market value
But don’t forget the importance of Marketing, which was discussed last week. Only outstanding Marketing will help you get the maximum price the market will pay. Next week we’ll consider whether a Sole or Open Mandate will give you the best result.