Determine Your List Price

When you’re trying to determine the market value of your home, and ultimately decide on what price to list it at, the most important rule is to Be Objective!  The properties that we live in are not just bricks and mortar, they are our homes.  Many sellers develop sentimental attachments to their properties and this can sometimes cloud their judgement when it comes to determining the value of their home.

The best approach to take is to switch roles; pretend that you a buyer looking at your property.  Take a good hard look at the positive and negative features that your home has to offer, and be critical in doing so!  Buyers who come through your home will see it very objectively.  They will not overlook the missing paint touch ups that you’ve been putting off for years, or the older bathroom that you’ve been meaning to upgrade… they will see the property as it currently presents itself and will compare it to other options on the market within their price range.

When pricing your home, there are 3 important things to consider:

1 – The market conditions

Ultimately, as sellers, we can list our properties at whatever list price we like, but the open market will determine what it will eventually sell for.  Value is only as high as a buyer is willing to pay.  The current market conditions, and economic principles of supply and demand, usually determine this outcome.

The best way to determine the realistic value of your home is to compare it to other homes that have sold recently that are similar to it.  These are known as “comparables.”  Similar sales will give you a historic guideline of what to expect from the outcome of your sale, not only in sale price, but also length of time on the market.  Naturally, some neighbourhoods are more sought after than other neighbourhoods, and the more sought after neighbourhoods tend to have quicker sales.

For example, if 3 of the neighbouring properties to yours sold for $250,000-$270,000 last month, and were on the market for 20-30 days before they sold, you should probably expect a somewhat similar outcome.  When you have comparables like this to look at, you can objectively compare their features to what your home has to offer.  This is often the best way to determine the value for your home.

Another great option, thanks to the proliferation of online marketing and full interior photos of homes, is to compare your home to other similar homes that are currently For Sale in your neighbourhood.  Again, you can compare the features that they have to offer, and then price your home according based on how your selling features stack up against the competition!  You want to make sure that your home is the most appealing for buyers when they compare your asking price to other homes in your area.

It is also important to have a bit of leeway in your price.  If you are expecting to walk away with a sale price of $250,000, it is usually a good idea to list it slightly higher, at perhaps $254,900 or $259,900.  This will allow you to have a bit of negotiating room between your asking price and eventual sale price.  According to CMHC reports for 2008, the gap between the asking price and the selling price is normally between 4% and 8%, rarely more.  However, in some areas where there is exceptionally high demand, this gap tends to shrink and sometimes disappear completely.

2 – Your timeline to move

Sometimes this can be a very important factor when pricing your home.  If you are in a situation where you need to sell as soon as possible, it is sometimes better to aggressively price your home with the hopes of a quick sale, and in turn less carrying costs & expenses.  Perhaps you got a job transfer to another city?  Or you found the home of your dreams but have to close quick on it.  If you don’t want to be in a situation where you could potentially get stuck owning two homes at the same time, it is sometimes better to price your home slightly under fair market value, just to ensure a quick sale and manage your future potential risks.  Instead of listing your home at $259,900 with the hopes of getting an offer in the $250,000 range, perhaps list it at $249,900, but stick firm on your asking price, or close to it.

However, on the other hand, if you’re in a situation where you have lots of time to market your property and find the perfect buyer that is willing to pay you top dollar for your home, then it doesn’t hurt to reach in price and see what the maximum possible sale price might be.  Instead of listing at $259,900, you could reach a bit and try $264,900, or possibly $269,900 even.

3 – Your bottom line

Once you have determined what your expected sale price will be, you can then calculate whether the amount remaining, after you have paid out all of your costs and expenses pertaining to the sale of your property, is acceptable to you.  This should include, but not limited to, mortgage balances to be paid out, mortgage discharge or transfer penalties (if any), lawyer’s fees, marketing & advertises expenses, etc.

If after doing these calculations you decide that the balance remaining is unacceptable to you, then perhaps now isn’t the right time for you to sell your home.  Sometimes it is better to wait for more favourable market conditions where you might obtain a higher sale price for your home.

Prepping Your Home For Sale

Cosmetically, we always recommend to “de-clutter” and “de-personalize.”

De-cluttering a home can be a challenge at times, but it really helps a home show in its best possible way.  This includes removing any unsightly collections of possessions from around the home, removing large pieces of furniture that overpower a room, and cleaning off any surfaces such as countertops, mantles, tables, etc.

De-personalizing a home is just as important.  Buyers need to be able to visually picture themselves living in your home.  It’s much more difficult for them to do that when there are pictures of the current owners on the walls throughout the home.

We also recommend to do a pre-selling walk-through inspection, noting all the repairs and fix-ups necessary to make your home stand out from the competition. Complete these repairs before selling. Some sellers even go as far as hiring a home inspector for a pre-listing inspection to ensure that they discover any issues which could hinder the sale of their property down the road, or possibly even cause a deal to fall through when future buyers complete their own home inspection on your property. This will help ensure a smooth, hassle free transaction.

Not only do homes have to be visually appealing, it is also important not to overlook the scent and climate of your home during viewings to potential buyers.  Sometimes we grow accustomed to the scents of our homes; whether it is specific spices that we use in our cooking, our love for our pets, or if you’re a smoker.  It is imperative that the scent of your home is just as appealing as the cosmetic finishes.  This extends to the climate and temperature as well.  On a hot, sweltering day, it is refreshing for a buyer to step in to a cool, air conditioned home.  This pleasant feeling will help them mentally enjoy your home, rather than being distracted by how warm it is outside.

Marketing Your Property

This is where we come in!  At AlphaSold.com, we offer marketing packages that fit every budget; from barebones packages to our top end, but still affordable, Alpha Package!  In today’s real estate market, online advertising is critical.  Listings advertised through Alpha Property Marketing Group are always displayed in their best possible light.  Most of our packages include professional wide angle photography, all the proper real estate signage, and maximum exposure on online advertising platforms, including the MLS system and Realtor.ca!

Spread the word about your home sale through advertising, open houses, social media, and especially by telling everyone you know that you’re trying to sell your home!  Signs and ads only reach a small percentage of potential buyers.

Many buyers come from referrals of satisfied customers and co-operating multiple-listing service brokers.  Consider offering a possible commission to real estate agents if they have a suitable buyer for your home… afterall, you will still save thousands of dollars as you don’t have to pay the listing salesperson’s portion of the commission.  Also, remember that you only have to pay a commission if the real estate agent’s client makes you an offer that you’re happy with. It doesn’t hurt to see what price and terms they are offering you, and you can take into account the commission that you will have to pay.  For example, an offer of $250,000, while paying a 2% real estate commission is the same as getting an offer of $245,000 privately.  Through partnering with local real estate brokerages, this is how we provide our customers with MLS exposure.  As well, real estate agents are still enthusiastic to sell listings advertised on AlphaSold.com, unlike many of our competitive private sale companies.

Lastly, be ready to answer the phone and give every prospective buyer a private home tour at the prospect’s convenience.  They won’t make you an offer unless you give them a chance to see it in person and fall in love with your home’s great features!

Completing The Sale & Negotiations

Try to keep interest in the sale high while you resolve any of the buyers doubts, agree on the price, terms, inspections, date of possession, as well as respond to any objections. Be prepared to explain the contract to the buyers and write any amendments as necessary. Have the contract examined by your real estate lawyer and suggest that the buyer does the same.

Manage any details of the offer carefully to prevent any problems and a lost or delayed sale. Schedule inspections, conduct the buyer’s walk through inspection, obtain all the necessary paper work, follow through with the lender and answer any questions that any parties may have.  It is always best for all parties to be fully informed with all matters pertaining to the property being sold.  Full disclosure is always the best policy, as this will eliminate the risk of future problems coming to light after the property has already closed.

Selling your home can seem like a daunting task at first!  However, as you work your way through it, small steps at a time, you will find that you are more than capable to get the job done and save thousands of dollars in real estate commissions while you’re doing it!  And if you have questions along the way, we’re here to help!  7 days a week, we’re as close as a phone!

If you would like more information on how selling your home with AlphaSold.com works, feel free to schedule a free, no obligation, in-home appointment.  One of our customer service specialists will sit down with you, discuss how our programs work & how we differ from the competition, and will answer any and all questions that you may have.