What is my home worth?
Pricing at or near market value will always make a property easier to sell and within a shorter time. The fact that a house sells quickly does not mean that money has been left on the table, if all the research has been done and the marketing has alerted potential Buyers to the property it will get you the seller top dollar. There's an old saying in real estate that your first offer is usually your best offer, and that is because the person who makes that first offer is hyper-aware of the neighbourhood as they have likely been targeting it and waiting for a place like yours to come onto the market.
Pricing analysis
Sometimes pricing can prove to be difficult, luckily there are plenty of comparable sales, and with your purchase not being too long ago I can pretty much get my estimate to within 1% of where it would sell.
Market value is defined as the highest estimated price in terms of money allowing a reasonable time to find a purchaser who buys with the knowledge of the uses to which it is adapted and for, and for which it is capable of being used. A reasonable amount of time for a GTA property is 24-30 days, or 15 showings. Once you go over this time/ # of showings you should reconsider your strategy.
Pricing Do’s and Dont’s
Are you familiar with the contrast principle?
Sometimes it's a beauty contest and price war, we have to find the balance. We can put it on at a price that helps others sell, or we can put on at a price that helps yours sell. We've seen the other homes, we can show them to you if you’re interested. I can’t stress this enough, marketing your home 10% above market value to leave room for negotiating never works out in the sellers favour! Bottom line: Don’t be the setup house!
No. 1: The real estate market is like the stock market
When sellers purchase their property in a heated market, it may be years before they can recoup their previous purchase price plus their cost of sale. Nevertheless, many still believe that when they list their home for sale, their price should be based upon their acquisition costs. This belief leads to extended listings, and frustrated sellers
No. 2: Your house has to qualify
The house, not just the buyer, must qualify for the loan. This being said the bank will only loan the purchaser the money if the valuation is correct or within the realm of correct. The purchaser may remove the home finance condition within the 5 day period, the bank may do the appraisal 2 weeks prior to closing, if they do not agree with the price the purchaser would be on the hook for the difference of what they paid and the banks appraisal amount. If they cannot come up with this money then the deal would default and your (homeseller’s) future plans would have a major wrench thrown in. Read more here: https://buschteam.ca/b/blog/recent-posts/what-if-the-bank-does-not-appraise-your-home-for-what-you-paid.html
No. 3: Are you in the X percent that will sell this month?
?The rate of absorption (how quickly properties are turning over) is one of the most powerful tools for measuring your chances of a successful sale.
Months of inventory
=active listings / solds over a 30 day period
=months of inventory
?The rate of absorption (how quickly properties are turning over) is one of the most powerful tools for measuring your chances of a successful sale.
Months of inventory
=active listings / solds over a 30 day period
=months of inventory
It would take this many months to deplete the current inventory, remember there will also be new inventory that comes to market during this period of time. This is why the right price and strategy is the most crucial.
When months of inventory is below 3 it’s a sellers market, 3-6 is balanced and, 6 + is buyers.
When you are in a balanced market the reality is that it is a beauty contest and a price war. Meaning you would need to pinpoint times when inventory is low, and now seems like a good time.
Strategy options
We find that when we are in a balanced and a seller's market the option to price low and sell high is paramount in maximizing your value. Undoubtedly, being in a position of power is best when negotiating, and the best way to do this is with a pricing strategy. You will find it advantageous to have your buyers bid up, instead of you negotiating down. It allows the ball to bounce more in your favour, with all of the crucial elements that are part of an offer. Including: Terms/conditions, closing date, deposit amount and price.
Pricing psychology and strategy
Would you rather have your buyers bid up your homes price, or negotiate down. Strategies will differ for different homes at different prices, however given our experience with the multiple offer strategy we do find it favourable for our sellers. Take away the downside risk and build in the upside potential. You get to pick your preferred closing date, and set the tone for offer expectations. It works. Most of the time the median is at market value range and there will always be a couple outliers, and thats where you benefit!
Were masters at it. See our process which sets the bar on expectations!
Were looking for your “A” buyers the buyers who are willing to offer you market value or slightly more, along with the closing date you are looking for in combination with no conditions, once weve been on the market for 2+ weeks were likely going to be seeing offers from your “B” buyers.
Pricing psychology and strategy
Would you rather have your buyers bid up your homes price, or negotiate down. Strategies will differ for different homes at different prices, however given our experience with the multiple offer strategy we do find it favourable for our sellers. Take away the downside risk and build in the upside potential. You get to pick your preferred closing date, and set the tone for offer expectations. It works. Most of the time the median is at market value range and there will always be a couple outliers, and thats where you benefit!
Were masters at it. See our process which sets the bar on expectations!
Were looking for your “A” buyers the buyers who are willing to offer you market value or slightly more, along with the closing date you are looking for in combination with no conditions, once weve been on the market for 2+ weeks were likely going to be seeing offers from your “B” buyers.
Make sure to…
Choose the agent who is honest when it comes to price. You do not want to pick someone who over promises a price and cannot deliver. What happens all too often is a homeowner will consider two or three agents. They likely select the agent who tells them that their home is worth the most, rather than the more accurate number. The home will sit for 3-6 months and that agent will likely try and have the homeowner reduce their price to re-stimulate the property. Given the reduction in price and staleness on the market, potential buyer clients are left in the driver’s seat, and feel they have the upper hand in negotiating. I've seen this happen to often. Take a look at our detailed analysis
Consider comparables. What have other homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities?
Consider competition. How many other houses are for sale in your area? Are you competing against new homes?
Consider your contingencies. Do you have special concerns that would affect the price you'll receive? For example, do you want to be able to move in four months?
Get an appraisal. For a few hundred dollars, a qualified appraiser can give you an estimate of your home's value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact me for recommendations.
Ask a lender. Since most buyers will need a mortgage, it's important that a home's sale price be in line with a lender's estimate of its value.
Be accurate. Studies show that homes priced more than 3 percent over the correct price take longer to sell.
Know what you'll take. It's critical to know what price you'll accept before beginning a negotiation with a buyer.
Also, remember that you may want X for your house and it may be worth Y. If the purchaser is utilizing mortgage financing with this purchase you and your agent will have to consider that at closing the bank will appraise your home, if the offered price will be higher than the appraisal value the deal could be at risk. The reason why this is so important is that all banks will take the lower value of either the appraisal or the Agreement and loan based on this. The buyer could forced to shore up the difference with their own money (if they have it, if not the deal is at risk of default). It's imperative that we do our homework on the buyer.
Its also important when you are looking at offers to consider offers that are high-ratio (under 20% down) vs. conventional (20% +) If you want any more clarity on what it means to have a solid deal at the right price please read more here
https://buschteam.ca/b/blog/recent-posts/what-if-the-bank-does-not-appraise-your-home-for-what-you-paid.html
Getting a few opinions? Some agents will come in and give you the highest price, and tell you what you want to hear, setting false expectations, we're honest and truthful. See what to look for in an agent here. Who you choose matters.
Also see our decision-maker tool to help guide to make the right decision for you: https://buschteam.ca/b/blog/recent-posts/the-decision-maker-tool.htmlPrice right to profit more.
We’ll spend a bit of time on the topic since its essential to your success!
Ensuring we match the right price with the right strategy is what we do best!
When using the direct comparison approach we compare the 5 major categories: Location, Square footage, Lot dimensions, Age of the property, Quality of finishings + Construction.
We are finding with all of our listings that buyer price sensitivity is at a high. Making sure we price it right is the key to lots of quick traffic resulting in an offer or a couple of offers competing for your home, ultimately resulting in the best options for you.
We're looking for your “A” buyers the buyers who are willing to offer you market value and then some, along with the closing date you are looking for in combination with no conditions. (These buyers are likely sitting in the weeds right now, waiting for a home like yours to come on the market) Once we’ve been on the market for 3+ weeks we likely going to be seeing offers from your “B” buyers, (people who are casually looking) which is not ideal and the reason pricing it right is so important.
Read more on pricing here
With inventory increasing its important to be priced correctly, not to high and not to low.
It's a beauty contest and price war, we have to find the balance. We can put it on at a price that helps others sell (You dont want to be the set up house), or we can put on at a price that helps your home sell. We've seen the other homes, we can show them to you if you’re interested.
In a market like this you need a partner who is prepared to defend your asking price. Buyers and their agents in your neighborhood can be aggressive in a market like the one we are in. A really solid marketing plan and a fact-based CMA is crucial in these times.
A lot of planning goes into the right strategy. Utilizing the right strategy, and knowledge of all other recent solds and current active listings is imperative in coming up with this winning strategy
I can’t stress this enough, marketing your home 10% above market value to leave room for negotiating never works out in the seller's favour!
First, it is important to understand that only the market can determine the ultimate value of your home. That said, choosing the optimal list price is essential to maximizing your home’s value. If you price too low, you risk not getting as much as you can for your property, but price too high and you risk losing potential buyers who may think your property is out of their price range and you help your competition sell faster.
Our price is not an opinion of Value - it’s a matter of fact. With bank-approved research methods we ensure accuracy, our goal is always to beat our estimates, but we do so with caution, not only by getting you top dollar but ensuring that your buyer is qualified to close the deal. If you're having second opinions on our valuation, we’re more than happy to order a third-party appraisal on the property. We also ensure absolute confidentiality to the pricing we’ve assessed your home at, which allows for pricing ambiguity when discussing your property with other agents.
You should also consider that your purchaser's bank has to agree with the purchase price of the property in order to approve the loan, they loan based on the lowest value of either the Home appraisal or the purchase price. This appraisal does not happen usually until the week of closing, its a consideration worth understanding when coming up with the pricing of your property and qualifying your purchaser.
Getting a few opinions? Some agents will come in and give you the highest price, and tell you what you want to hear, setting false expectations, we're honest and truthful. See what to look for in an agent here. Who you choose matters.