The price you ask for your house is more important than you might think. The first thing a buyer checks, when looking at property listings, is the price.
It has been mentioned before in articles on RealFact.net: When putting your house up for sale, price it to the market. No matter what you might think your home is worth - it is actually only worth what a buyer is willing to pay for it.
Get that silly idea out of your head! You cannot fool a buyer into paying more for your house than what it is worth. Buyers know what property prices are. They will come to your home knowing what it is truly worth.
At R900 000, the buyers will have certain expectations for the property. When they come to view the house, buyers will come to see if your property measures up to those expectations. And if it doesn't, they will walk away from your home NEVER to return.
Selecting a price that exceeds the house's worth is a bad pricing strategy. It is true what "they" say: You can always lower the price later. But what "they" usually don't tell you, is that you will most probably have to lower the price more than you ever expected!
While you were hoping to negotiate to a price above market value, or at least to market value, your unreasonably high asking price will probably cause the property to sell well below the market value, after a long wait. (You will soon see why.)
Selecting a high price, simply to allow you to reduce the price a little every week until you hit market value, also borders onto being an act of insanity. You will end up with a house sitting on the market far too long and an eventual selling price that will most probably be well below market value.
Why? Because you forgot that money isn't everything. And money can't buy love.
Okay. Maybe money is everything to some people - especially house buyers. And maybe money can buy love - but getting a buyer to fall in love with your "over-priced" home might cost more than it should.
I don't know if there is any truth in those two sayings, but what I do know is that first impressions are critically important.
When you select a price that does not reflect the market value for your house, you squander that valuable window in the market every new "for sale" listing gets. That is the short moment when the market stops to stare at the new-comer - sizing it up, to see if it is cool or not.
Selecting an inflated price for your property is like sending your kid to a new school and making him/her wear Granny's Sunday clothes. Buyers will take one look and laugh. And your house will be assigned to the exclusive group of un-cool houses that people point at and whisper about.
The first five days on the market are the most imortant days of your sale. This is the time when the most buyers are interested in your home. It might not be new, but it is new on the market. It might not be pretty, but buyers will take note if it is priced pretty reasonably.
Another saying I am quite sure of, is the one about time being money. Time wasted on the market equates to money being spent on mortgages, or lost to price reductions.
A seller that shouts, "time is not a factor", by selecting an unreasonable asking price
also whispers, "price will not be a factor, when enough time has passed".
In the current buyers market, experienced in most areas of South Africa, home pricing requires a lot of consideration. With a lot of housing inventory available, a prudent seller might do well to start his/her marketing effort at a price below that of the competition.
I'm not saying you should give the house away. But I am saying that your price offers you a chance to differentiate your property from all the others on the market. Research the properties your's will be competing against to sell. Try to identify a price at which your house will stand out from the herd.
It takes a strong person to acknowledge exactly how his/her property measures up against its competition. Is your house really the best on the block?
If your home has all the appropriate features buyers may desire, it might be worth a little more. But if your house dearly needs an aditional bathroom, a second garage, or an outside entertainment area, it is worth less than those that do offer those features.
Is your property in tip-top shape? Or could it use a bit of touching up? If it is pealing paint, if the carpets are worn, if the garden reminds one of a Kalahari landscape, or if the pet odors rush to meet you at the door, the house is worth less than a property in good repair.
Are you brave enough to determine in which category your house falls?
If you have six nearly identical properties competing in your property category, you may have to choose a price lower than you hoped for, even if your home is objectively the pick of the bunch.
In a stiff competition, you want your house to compete against the weaker properties in the area, not stronger ones. By selecting a price that puts your property in the same line-up as properties that are almost as good, you can sweep the floor with the competition. Suddenly your "average" house becomes a gem.
You are trying to sell your property. You're not trying to score points in a competition with neighbors, after all. You want your money in your pocket - and there is a deadline. Any intelligent strategy that can pull this off is something to consider, isn't it?
Selecting a price to make your property stand out in the crowd is a great way to make your house sell while the others sit on the market gathering dust. Buyers will see your home as the property that offers the best value for money, and buy it as quickly as possible.
Select a price to make your house stand out!
