The Perfect Price
The market determines the value or price people are willing to pay for a home in your neighbourhood. Your personal tastes, investment and emotional attachments don’t add additional value to the buyer. That can be a bitter pill to swallow. John Gourville, a marketing professor and expert in buyer behaviour at Harvard Business School says, “The buyer is looking at ‘What are comparable houses selling for?’ and the seller is thinking, ‘What did I pay for this six years ago?’”
Setting the price for your house is one of the biggest decisions you will make. Not only does the price determine how much you stand to make, it also determines whether anyone’s going to take your property seriously. Should you start high, with the expectation that buyers are going to try to bargain you down? Or should you start low, with the hopes of attracting plenty of attention, and the idea that the inevitable discounting is out of the way up front?
Never under price your property. Don’t count on quality buyers entering a bidding war to bring your property’s price up to market value. An unusually low price makes serious buyers suspicious of the value of the property, so you’ll only attract lowballers.
Most real estate experts agree that starting high, with the idea that you can always reduce the price later, can be a very costly mistake. With all the competition out there, your property must pop out immediately as a good value, or potential buyers are likely to move on, and never return. You get one shot at your home’s debut. According to Glenn Kelman, the CEO of Redfin, “The amount of traffic that a listing gets in its first week is five to seven times what it gets in its ensuing weeks. Let’s say you lower the price (later). No one will notice. You really are broadcasting that discount to a much smaller audience of buyers and will have the perception it is damaged goods.” Overvaluing your house can cost you more than time, and most listing sites display the price reductions. “They say, ‘He’s knocked $30k off the price; he’ll do it again.’ It’s death by a thousand cuts,” Kelman adds.
Give your house a reality check. Actively shop online for properties in similar neighbourhoods, the same distance from downtown shopping and amenities, similar calibre schools, and proximity to the nearest work centre. If your property doesn’t stand out as the obvious value, when compared with the properties they can get for the price you’re considering asking, it’s too high. An experienced local real estate specialist can also help you establish your home’s true value, and set the price slightly under that.
People aren’t fooled by pricing gimmicks like adding ‘999’ to the end, but setting a precise number suggests deliberation, and a formula or requirement of some kind. It lends credibility to the price and discourages lowball offers to some degree. A price like $900,000 almost begs, “make us an offer,” while $898,750 suggests the seller knows what they need to get from the sale.
Another thing to consider is search filters on websites. Here you want to choose your competition carefully. Listing websites typically filter in $50,000 or $25,000 increments. If a searcher selects the $850,000 – $900,000 filter, the properties in the upper end of that range will usually look more attractive. But the buyer is also looking for a bargain. The bottom listings will usually be ruled out immediately, as will the ones at the very top. Homes priced 75 – 90% of the way up in a filtered group tend to have the most visibility.
Home vs House
If you’re like most sellers, you’re hoping the buyer keeps your memories alive, will appreciate your taste and the improvements you’ve made, and will care for your home the same as you have. Your real objective, however, should be to have prospective buyers see it has their new home. They may hate the cabinets you selected, and want to completely renovate the kitchen immediately. The wall you took out to create a lovely family area for your growing children may be going back up, to create a bedroom and office.
If you listen for it, you’ll often hear seasoned Realtors refer to the property you’re selling as your “house”, and the one you’re planning to buy as your new “home.” It’s important for you to make that distinction as well. You have to let go of the property — consider it as nothing more than a marketable commodity — so you can identify what the real price should be, and begin the depersonalization process, so buyers can see their own belongings and memories moving in. It’s important to remove family photos, sentimental treasures and other personal items like grooming products.
When selling a home, colour psychology is definitely a factor. You’re looking for colours that appeal the the widest pool of potential buyers. You may love lime green and fuchsia, but few prospective buyers will want those colours on the home they’re moving into. Safe colours are off whites for the walls, with white trim. Light colours reflect natural light and help rooms feel larger. As an alternative to the popular eggshell white, tinting white with a subtle grey, blue, yellow or green can make rooms more inviting. A light blue or green in the bathroom or bedroom can give a sense of cool, quiet serenity. Light yellow in the kitchen or family room can create a cheerful, positive state for house hunters.
A couple with an empty nest has decided to downsize because the big house has become too much to take care of. A young family needs more space, so they require a larger home. They think back of their own moves, or those of their family. The purchase and move were stressful and chaotic, but afterwards, everything fit comfortably, had a place, things were spotless, and there was a calming sense of order. Upgrading or downsizing, it’s what they’re desperately hoping for following this move. So give them that picture.
If you look at a professionally staged home, it’s completely free of clutter, everything is sparkling and meticulously clean, every object is in its place and has a reason for being in the room. Consider the dining table, as an example. Do you need 6 chairs, or will 4 look less cluttered? House hunters will look in everything. Make sure everything they see is clean, uncluttered and organized.