SELLING? TIPS FOR SETTING THE ASKING PRICE

Once you have decided to sell your house, one of the first things to do is set the asking price.  This can be a tricky process as it requires finding a price which is the perfect balance between attracting the highest number of buyers and obtaining the best price for your property.  So where do you start?

The first thing to do is to complete a thorough inspection of your home with your real estate agent.  Make sure they point out all the advantages and disadvantages of your property.  Your agent can help you to see your home as a buyer may see it.  When you live in a property, you can sometimes be so close that you don't see any faults or features which should be highlighted during the sales process.

The second thing to do is to look at sales of similar properties in your neighbourhood.  By the time a buyer gets to your home, they've more than likely inspected similar homes in your area, or at least done some homework on prices in your neighbourhood.

You need to be as educated as a home buyer, so look at other properties for sale in your area or ask your real estate agent to give you a list of prices that similar properties have recently sold for.

Generally speaking, the asking price of a property will be slightly higher than the expected selling price (or market value), but any more than between 1 - 3% higher can be unproductive.  If your property is priced too high above its market value, you'll get fewer buyers inspecting your home and fewer serious offers.

There are some common reasons why people overprice their proprty and it's important to understand these reasons, so you don't allow them to influence you.

1.  Additions or renovations.  While many additions or renovations will help to increase the value of your home, very personal improvements, such as purple floors or hot pink tiles in the kitchen, are less likely to be viewed favourably by potential buyers and therefore may not justify a higher asking price.

2.  The need for money.  If you need to receive a certain amount from the sale of your home, you're more likely to set an asking price that is too high.

3.  You are moving to a higher priced area.

4.  You originally paid a high price for the property and want to recoup your initial outly.

5.  You believe sellers want bargaining room.  In fact, placing a too high asking price on your proprty can actually reduce bargaining power.

6.  If your move isn't necessary, you're not going to be as motivated and may therefore set a high asking price on your property.

So while there may be some negotiation involved in selling your home, remember that most buyers have done their homework and generally have a reasonable understanding of what is good value in a proprty market.

The most important thing to do when setting the asking price is to listen to your real estate agent and when you (and your agent) have determined a competitive price that's in line with what other houses in your area have sold for, you're ready to go to market.

(Information courtesy of Quartile Research)

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