Pricing your property can be quite challenging and may be the difference between 20 days on the market and 20 weeks on the market. By having a good understanding of what’s going on in the real estate market you are in, you’ll create better results. That last little bit, I can’t stress enough. You must know your market.
The Importance of Knowing Your Market
The data that is received within the news covers all of the city’s area and all properties. This is very general. Calgary, as with any other metropolitan area, is not consistent from quadrant to quadrant. It’s also distinct from inner city to the suburbs, and even within Calgary’s inner city communities.
When we look at type of property, there cannot be comparisons between condos and single family homes. These are two very different types of dwellings and way of living.
If we narrow it down to just your community there is also inconsistencies with each part of the community. Thus, you must know exactly what your market is and get a true understanding before determining the price of your property. To help you be more successful in pricing your property, I’m including five points that I use to determine price on my client’s property.
5 Details You Must Know When Pricing Your Property
- What properties were successful. This will include the properties sold in the past. Although, don’t go too far back. A property sold a year ago maybe in a buyer’s market, where you are now in a seller’s market. Also identify properties that are similar to yours. They may not be exactly the same, unless you’re in a cookie cutter community. So understand that there maybe some tweaking to be done to discover the right price.
- Do you know your competition. Define your competition as not one that looks just like yours, but one that a potential buyer will find suites their needs just as well. These I refer to as “relevant” properties. By this I mean that it can influence the sale of your home. Buyers are out there, along with you, finding properties to help them discover the value of a home. No one wants to overpay.
- The direction the market is going. I heard this once, “price the property for the future, not the past”. When we look at properties that have sold, that is all in the past. If the property sold in September and it’s now November, we have a totally different market. September is the peak season for the fall and November is when the market starts to drop with the start of winter. Understanding the seasonal changes is important. Another market trend to watch is where we are in the real estate cycle. For this you’ll need to look back a few years and see what direction the activity and prices are going. Once you have this information, determine what the value of your property will be 30 days into the future. This is especially helpful if the market is declining.
- What does your property have to offer that others don’t. This can be quite challenging and may take a bit to understand the value of features and benefits of your property. Comparing these details to other properties, sold and the competition, requires you to leave the emotion and the attachment to your property out of the equation. For instance, if you have kitchen updated 10 years ago, and a relevant property had their’s updated one year ago, then the buyer will see a difference in value. As well, if both kitchens were updated at the same time, although one has an awkward layout, buyer may see more value in the other home.
- Find out what wasn’t successful. These are properties that were on the market and didn’t sell. The reason you need to consider these properties is for two reasons. One reason is that if it was a good property to compare yours to, then learn why it didn’t sell. Was it price or what it offered. The second reason you need to consider the expired or terminated properties is that there is a good chance it will come back onto the market. The reason behind a home owner taking their property off the market is mostly due to the price they are asking. It doesn’t match the value that the buyer sees. Instead of bringing down the price to match the value of what the market will bare, the home owner will choose to wait until the market improves. If you’re headed into a market that’s improving, then this will be your competition.
This does seem like a lot of work to arrive at the correct price, and it is. Although the payoff is great! You’ll have less time on the market, less time showing your home and receive a good price for your property. Some of this information can be retrieved from the real estate board website and from your own investigating. When hiring a real estate agent to assist you, that person can efficiently provide all this information in a much more timely basis.
If you have any questions about pricing your home please feel free to contact me. You can also find out more about me on my website and connect with me on social media, such as my Facebook Inner City Page. Take care!