Pricing your home right is far more important than how you market it. If the pricing isn’t right, then whatever marketing efforts you make to sell your home will probably be in vain.
After selling 27,000 homes, my experience has taught me that price is the key to selling a home. I don’t mean you should choose a “give it away” price. I mean you should aim for a fair market value price. Setting your price too high can be as costly as setting your price too low. As I’ve said before, you don’t want to price your home too high and scare the buyers away, but you also don’t want to price your home too low and leave money on the table.
Property sellers face a dilemma when determining the asking price of a property for sale. The challenge they face is to balance the trade-off between the selling price and the time required to sell the property. A property seller must seek a difficult balance between two conflicting options: pricing too low and selling quickly but at a price that is less than maximal, or pricing too high, risking getting stuck on the market for a long time.
You need to be prepared and base your calculations on the actual market value. You should avoid arbitrary wild guesses. Just checking other listings for sale prices won’t be enough to determine your asking price. Those other properties may have been sitting on the Internet for months or even years without selling. You will just be measuring the value of your property against a wrongly priced listing that no one wants to buy. What matters most is which properties are actually sold and how many are sold.
You must avoid pricing your home using the following parameters:
1. How much it cost you to buy or build your house.
2. How much money you need to buy a new house.
3. The amount of your mortgage.
4. What your friends tell you.
You should base your pricing on recent comparable sales of similar properties in your area. Don’t fall into the trap of overpricing your home, thinking that you can achieve a higher selling price. Most sellers tend to overprice their homes because they are scared of underpricing them. But overpricing can cost you even more than underpricing your home: if you set your price too high, you are only helping your competitors to sell their homes.
How can you know if your home is overpriced? Firstly, if a dozen people have viewed your home and you didn’t get any offers, then obviously there is a problem. Most of the time the problem is the price. Dube and Legros from Laval University and the University of Burgundy have published a study of 29,471 transactions in the suburban neighbourhood of Montreal in the journal Real Estate Economics. As we have seen, the results of the study suggest that overpriced houses stay longer on the market and longer time on the market provide negative information to the buyers, which results in a lower final sale price.
If the price of a property is right, it will sell within eight to ten weeks of its listing date, even in a slow market. Overpriced homes need much more time to sell, and they need several price cuts. The data shows that a home that has been overpriced by 10% can take 40 weeks to sell, and only after the price has been cut below market value. Homes overpriced by 20% compared to the market value can take years to sell, and will also need to undergo several price cuts. Overpriced homes are eventually sold below market value. The higher the difference from the market value, the higher the losses. The more you overprice your home, the longer it stays in the market and the more you have to drop the price below market value to secure a buyer later on.
If your home is on the market and you realise that you have made the mistake of overpricing it, take a deep breath and make one big cut that will bring your listing price to the real market value. Making small price cuts over time is like a slow death. You will lose more money than you imagine; agents and buyers will both see your listing as stale, and their interest will be lost. In the case of overpricing, you will have to lose a lot of money to generate interest again.
Pricing a property for a successful sale isn’t as easy as it seems. Estate agents and property valuers often struggle to estimate a fair market value. Estimating the best asking price for your home isn’t a pure science: it is both a science and an art because of the continuous market changes and individual characteristics of each home. The more skilful and experienced the estate agent who determines the property market value is, the greater the chances are that you will get the price right.
The science of pricing is a rational analysis based on historical data and facts, but the art is the ability to forecast the future. The science of property pricing is based on your agent’s ability to observe and analyse the current property market conditions, key economic indicators, your neighbourhood, your property characteristics, and recent comparable sales data. Masters of the art of pricing are those agents who have a confident gut feeling about which direction prices are moving and at what speed.
You can distinguish a professional estate agent from the rest by their instant ability to price your home with confidence, based on their knowledge of your local area. An amateur or inexperienced estate agent won’t suggest an accurate listing price. You must avoid the kind of agent who isn’t sure about the market value of your home. Usually, an agent who fears telling you how much he can sell your house for is the one who will cost you most. The inexperienced agent will ask you to list a price to test the market. However, such testing will have a huge negative impact on the marketability of your property. If your home isn’t sold in a short period of time, you will have to sell below the real market value.
The psychology of pricing our own things
We grew up with the idea that the more we own the better. So, when we sell something, we suddenly feel that we own less. We typically value our belongings much higher than their actual value. We want to sell at a high price and buy cheaply.
You will be familiar with purchase guarantees: for instance if you purchase an item and you aren’t satisfied, you can bring it back and you will get your money back. Well, this is all about psychology. Most people grow attached to an item once they buy it. When you use a product, you feel that you have added value to it because is yours. As a result, very few people will go back to a shop to return an item unless there is a serious reason to do so. In practise, a purchase guarantee works well for the retailer: it makes it easier for people to make a purchasing decision, but retailers know that most buyers won’t come back to reclaim their money.
When you are told the true value of your home, it can sound extremely low or even ridiculous. You may feel offended. You are psychologically attached to your home. Your home has accumulated many belongings and living experiences, which makes you even more attached to it. But you should bear in mind that, despite how you feel, there are many other properties on the market just like your home and some even better than yours.
Don’t let your fear of selling your home to turn into price-phobia
The biggest fear of home sellers is pricing their home too low. The possibility of selling lower than the actual market value and leaving money on the table terrifies sellers. Don’t let your fear of underpricing your home to turn into a phobia. The phobia of leaving money on the table typically results in an early onset of fear which will then be present all the way during the sale of your home.
If your fear of selling at a low price is intense it can be converted into price-phobia. Price-phobia makes your fear of selling your home so illogical that your pricing decisions are only based on emotions. Your price-phobia will then make you feel anxious about selling your home. Unconsciously, you will actively avoid the sale of your home by pricing your home high and rejecting any reasonable offer.
Many sellers make this mistake of overpricing their homes, and trust that they will be able negotiate down to come closer to the market value, and will also get some extra cash in the process. This strategy very rarely works. In fact, it almost always backfires.
Sellers should be more afraid of overpricing than underpricing their homes. The consequences of pricing your home too high are catastrophic, and in the end, you lose money. So, my advice is price low to sell high. That means starting with the right price will give you the best price you can achieve.
A very interesting study done by McGreal et al. about the relation of price to the time on the market for residential properties within the Belfast (U.K.) metropolitan area showed that sellers who list their properties at a lower than the actual market value had the shortest selling time and the highest selling price. Note that it is common in the UK to list a property for sale with an asking price as a starting point and accept offers above the asking price, in contrast to the US where the list price is normally viewed as the upper bound.
The goal is to sell your home at the highest possible price in the least amount of time and with the least inconvenience for you. The fear of losing money when selling won’t help you get the most for your home.
Price-phobia reflects a lack of knowledge. Your lack of knowledge about the real value of your home makes you feel insecure, and leads to the mistake of overpricing your home. Your fear of losing money will only go away if you know your home’s real value. But you can easily acquire knowledge of how to price your home to sell it at the highest possible price by studying the recent sales of similar homes in your area and discussing the market value of your home with your estate agent.
A friend of mine likes to invest in property. He is always successful at selling homes in a very short amount of time. He has a lot of experience in buying and selling homes. I asked him how he always manages to sell his properties so fast. He explained that every time he wants to sell a property, he follows a strategy of estimating the selling price. First, he goes online and checks all the similar listings for sale in his area. Then he studies the recent sales and he sets his asking price 5% below the market value. That means he has an advantage compared to any other similar property in the market. The result is that even in a slow market he can sell his properties in less than six weeks.
The two main factors that affect your property price
Location is the most important pricing factor of all, and it is the only pricing factor that you can’t change.
Your property location characteristics and accessibility affect your property price. Among the things that will affect your price negatively are a neighbourhood with a bad image or high crime rate, difficult road access, a busy street, or if you aren’t near necessary amenities so that there is a lack of services nearby. On the other hand, a safe neighbourhood, easy access to public transport, proximity to amenities, and the closeness of shops, restaurants, cafes, and services all add value to your property.
Urban planners use a metric which is called “the ice-cream effect.” The Ice-Cream Index is the percentage of people in a community who believe that the area is sufficiently safe for an eight-year-old child to leave home, go to the nearest place to buy ice cream without needing to cross major highways, and come home alone safely. That indicates that the house’s location is good for families with kids and for older people who prefer not to drive.
Areas that are more walkable are more resilient in a crisis. Homes in these areas don’t lose their value as fast as homes in other areas, and generally, they appreciate faster compared to homes that are dependent on driving.
Condition and age
The way you live and the way you prepare a home for sale are two different things. Remember you are competing with lots of other home sellers who are perfectionists and who may have no pets or children.
Some things won’t give you a measurable return of your money. For example, don’t expect to sell your home at a price higher than others simply because you have bought the most high-tech white goods such as a brand-new fridge or washing machine. However, these things will make your home more attractive and saleable.
So, these upgrades may increase saleability, but they won’t increase value. Things like lighting fixtures, home automation, and fancy curtains may reflect the owners’ lifestyle, but most of the time your style won’t match the buyer’s style. Therefore, instead of investing in things you think are fancy or sophisticated, it is better to keep things simple. The buyers will then have room to imagine how to personalise it, and every new buyer loves the process of dreaming how to personalize a new home based on his or her own imagination.
However, there is a single highly effective way of making your home look better and usually adding some value to it. This is painting. New paint always makes your home more saleable and better looking. If you freshly paint your house inside out and fix any obvious rough spots, then you have accomplished the single most important step in preparing your home for sale.
Also remember the old saying: “How your home smells is important.” It is hard to believe, but how your house smells during a viewing can completely change the buyer’s perception of it. Try a scented candle and open windows or doors if weather permits. However, you must avoid using strong or powerful smells such as intense or artificial fragrances. Bear in mind that something may smell nice to you, but still deter a buyer who has different tastes.
It is paramount that your home and especially during viewings must shine. Clean and throw away as much junk as possible. A clean, decluttered house is much more attractive than a dirty and smelly house. Clean and keep your home fresh for every buyer who comes on viewings.
The most common pricing mistakes and how to avoid them
There is a common mistake many sellers make when they try to figure out the market value of their property. They check online or look around checking the asking price of other properties like theirs. Asking prices will tell you nothing about the value of a property. In fact you will probably get a false feeling about your property value by comparing it with wrongly priced properties that have been on the market for a long time. What you need to find out is the actual agreed-upon prices of similar properties recently sold. Do not base your property valuation on asking prices without guidance from your agent; it is risky, and you may end up with incorrect pricing. Get the right data from your estate agent or a property valuer.
Another mistake sellers make when pricing their homes is to value their properties based on personal assumptions or on friends’ opinions or advice. If prices of other homes are quoted to you, you must judge the reliability of the source you receive the information from.
Ask your agent to provide you with a competitive market analysis (CMA). A CMA is a list of for sale and recently sold properties similar to your property. Usually, it includes a suggested selling price based on comparable data. Estate agents may also provide you with the probability of selling your property for a specific price within your target period of selling. Later in this book, we will reveal a formula that shows how you can find the probability of selling your home fast and getting the maximum value.
Productive estate agents aren’t averse to showing you their website performance. Your agent should be able to estimate how many days it will take to sell your property based on his or her data of online visits, viewings, and a number of recent comparable sales. Use an agent who is employing scientific methods backed by real data and based on developing the right selling plan for you.
There are agents who sell property through pure luck. Sadly, the business model of such estate agents is the list and pray model. They list a property, and then hope to be lucky enough to receive a request or a referral at the right moment. But when you are selling a home, you can’t rely on pure luck because you risk exposing your listing too long in the market and the property then losing its appeal to prospective buyers. You also risk having to reduce your price and lose money to make the sale attractive again.
It is good to review your pricing every two months if the property hasn’t been sold, in case the market is changing. But if you price the property right the first time, you won’t have to do that because it will sell in a timely fashion.
Reducing or increasing the price is an art that may seriously affect the sale of your property. You must do it carefully with the help of a professional.
What is the cost pricing approach and why must you avoid it?
Some people think that property value is your cost of land, plus the construction cost, plus your profit. What do I mean? Many times, property sellers do the pricing of their homes as if they have a factory producing a specific product. They calculate the cost to manufacture an item and they add a profit on top.
This is a false and dangerous way of pricing your home. First, property prices aren’t determined by the construction cost or how much the land cost. Second, no two homes are the same. Even if they have the same floor plan, the same specs, and they are built in the same subdivision of land, they still sit on a different plot. You may see many very similar houses or apartments but there are no two exact same properties.
Think about it: if you have a factory that produces chairs you can manufacture thousands of the exact same chairs. The same applies to other products like cars, mobile phones, clothes, and so on. However, this simply isn’t true for houses and apartments.
Why is it wrong to use a simple formula of calculating the cost to build a house including the cost of land and then add a profit onto it? Sounds logical right?
But any property pricing method that ignores the price of comparable homes for sale in the market is plain wrong. And the sellers who use the cost approach usually deliberately ignore the fact that there are other similar properties for sale in the market. They think that they will offer a property and the market will magically absorb it because there are enough buyers for every property in the market.
Sellers who use the cost pricing approach also imagine that anybody else selling a property will use the same method of pricing their home. Sellers who use the cost pricing approach also tend to believe that buyers have no other way of acquiring a property other than by building one themselves. This distorted rationale goes even further with the belief that buyers will pay the seller a premium for profit on top of the cost of construction and land.
In other words, sellers who thoughtlessly use the cost approach when pricing their homes tend to ignore the fact that property buyers can find many similar properties on the market at prices determined by the current market forces of supply and demand.
I will tell you a story here to clarify my meaning. A friend of mine who runs a restaurant had a mortgage from the bank of six hundred thousand euros. He was struggling with his payments. So, one day he had a brainwave about how he could pay off all his debt and even save some money. He owned a plot with an estimated market value of 200,000 euros. His idea was to build a house on this land and sell it for a profit. He went to the bank and took out an additional mortgage of €250,000 euros to build a house on his plot. His total debt thus accumulated to €850,000.
Based on his cost approach thinking, he decided to list his house for sale at the price of €950,000. His logic was the following: the cost of the plot was €200,000, plus €250,000 for the construction, so the total cost was €450,000. His reasoning was that in his restaurant he sells dishes at three times his cost, so for the house, he would do the same. Based on restaurant profit margins, he calculated the selling price to be a bit more than twice his cost, which means his estimated asking price was €950,000. What a disaster!
You know what happened. He never sold it. The actual market value for such a property was around €400,000 and he was asking €950,000. The bank repossessed the home plus the other assets he owned to cover his accumulated debt.
Any method of pricing your home will only be worthwhile if it takes into consideration comparable and recently sold homes. If the construction cost of your home is higher than that of the similar homes sold and you insist on asking a higher price than comparable homes, you just won’t be able to sell.
How do property developers make a profit then? How can anyone sell above the total development cost? We don’t say that the market conditions are always such that you can’t make a profit when building a house. If the market value of your property compared to similar homes is higher than the land and building cost, then, of course, you will sell it at the market value and make a profit. The whole point is to understand that the selling price of your home is based on comparable properties and not on the land and building costs.
If you are a private seller you will already know that there is no equivalent selling practice by which you calculate your construction costs, add your profit, and sell. If there are comparable properties on the market at a lower price than yours, obviously it will be very hard to sell yours. Also, the cost approach is dangerous if the market is going up and the market values of properties comparable to yours are much higher than your initial cost of land and building. That means you risk underselling and leaving money on the table.
So, if you ignore the properties on the market, the market will ignore you. Don’t forget that your property price isn’t determined by you but by those willing and able buyers who may purchase your property instead of buying the property of someone else.
To summarise what we have said: There is nothing wrong with calculating the cost of your building and land for reference purposes. What we suggest is to take seriously into account the comparable properties in the market and see how you can price your home competitively. Only if you know how much you can sell it for at market value, will you know how much profit or loss you will make selling a property that you are planning on building.
Use superstition to sell your home for more and faster
It often pays to know what may prevent you from selling your home when everything else seems fine. Homes that are in perfect condition and priced right in good locations may nonetheless fail to sell. Any estate agent would consider these homes to be good purchases, but for whatever reason, they stay unsold on the market while other similar homes sell. No matter how much weight you give to luck or superstition, you should remember that we live in a multicultural society, and each person may have his or her own taboos or superstitions.
The most common superstition is the association of number thirteen with bad luck. In many high-rise buildings, the floor number thirteen is omitted. Years ago, many villages and municipalities avoided house number thirteen in addresses. Friday the 13th is considered a bad day for purchasing a home or signing a contract. For the Greeks, Tuesday the 13th is considered worse than Friday the 13th because it is the day on which Istanbul (formerly known as Constantinople) fell to the Ottoman Turks bringing an end to the Byzantine empire. When it comes to selling houses with number 13, agents have mixed experiences. There are buyers who will completely refuse to view a house with number 13. Others consider it lucky and have no problem buying it if is right for them.
Similar negative perceptions exist about the number 666, which is known as the devil’s number. You will almost never see any house advertised at a price that includes 666 or 666,666.
If you are targeting the Chinese market, you should know that their lucky number is 8. If your home number is 8 or your house number or price has one digit 8, it is considered lucky and desirable. Many home sellers price their homes including the number 8 to attract more interest. However, as we’ve seen, the number 4 should be avoided for the Chinese market. In the language of China, the number 4 sounds almost the same as the word death and is considered very unlucky.
Everyone has heard about Feng Shui. Feng Shui is an old philosophy originating in China that is used in homes and urban planning. Its purpose is to create a calm, harmonious environment and improve the flow of qi “or positive” energy, which is thought to benefit the people living in the house.
Holly Ziegler wrote a book about how to sell your home faster using Feng Shui. According to Ziegler, there are five Feng Shui deal breakers. Most Asian buyers will avoid buying a house with the following characteristics:
• A home with the bathroom located in the central tai chi area, the area where all of the energies are in perfect balance.
• A home with a spiral staircase in the centre.
• A home with a staircase directly in front of the front door.
• Property located at a T- or Y-junction road with heavy road traffic.
• An excessively oddly shaped home.
The India Times newspaper conducted a survey in 2015 that showed that 93% of Indian home buyers seek Vastu-compliant homes. Vastu is an ancient science of architecture in Hindu tradition. A property with a good Vastu provides the occupants with well-being, money, health, spiritual growth, and inner harmony. If you are selling to an Indian family, you should do your research on how to prepare your home to sell. There are many tips online about how to use Vastu to sell your home. The main characteristics of a bad Vastu home are:
• an unidentified form home with five or more corners;
• triangular shape of land, flat, or house;
• property with a southwest entrance;
• property adjacent to a hospital, church, or cemetery;
• property in which someone was suffering from cancer or who died an unnatural death;
• property that has been empty for years and doesn’t want to “be sold”;
• properties which have had frequent changes of owners or tenants;
• cheaply available properties and those that are dispossessed due to debt.
Three or four times a year, the planet Mercury is said to go retrograde — that is to say, it moves in the opposite direction to planet Earth. Many people refuse to make any decisions or sign any contracts during this time since it is thought that people are more likely to make bad or unlucky decisions. If you happen to be expecting an offer or contract signed during this time, you may encounter a delay, but you can be optimistic that with a little luck your sale will eventually go through.
I once had a client named Steve who was selling his house. We had agreements for the sale of his house four times, and each time the sale fell through for various reasons. After the last time, I visited his house to discuss what we could do to get rid of the bad luck. We walked through the house and then stood at the main entrance. There was nothing wrong with his house. It was a nice three-bedroom bungalow in a good neighborhood close to all amenities. The price was a bargain so there was no reason to reduce it more since it was already lower than the market value.
While we were walking to the front entrance gate, Stephen’s mother arrived and parked in the street. She came out of the car and entered the house through the main entrance. She asked me “What happened?” I said with embarrassment, “We aren’t very lucky, the sale fell through again.” Immediately she answered, “Cut the cactus, it doesn’t let anyone come into the house except Steve.”
Steve had planted a cactus on the left side of the pathway to the main entrance a few years ago. His mother believed that the cactus was protecting Steve by not letting others come in the house and that he should cut it down. Believe it or not, after Steve cut down the cactus a new buyer was found just four days later, who successfully completed the sale three weeks later.
The American chef Graham Elliot said, “I only wear red socks in the kitchen. They bring me luck.” If you believe in anything that will bring you luck in selling your home, do it. You have nothing to lose by doing so.
And remember, if you don’t believe in superstitions, it doesn’t mean they don’t exist.
How to keep your home under the buyer’s radar
Surprisingly, some agents may advise you to price your property high and then drop the price in the negotiations. As we’ve seen, this generally only happens when an agent desperately wants your listing.
Congratulations, you have just listened to the worst possible advice. You have just placed your home off the clients’ radar. For example, if you have a 250k home and you list it for 350k euro, your potential buyers will never even find you. Nowadays people use the Internet to search for a house in their price range. People looking for comparable homes to yours will limit their searches to homes within their price range. They will never search for a 350k euro home since they can’t afford it.
What you will have achieved is to put youserlf in competition with better, bigger, more luxurious properties in better locations than yours in the 350k euro range. Do you know what that means? Your home will have the worst value for the money on the property search results, and there will be no interested clients. Weeks will pass, and you will think that the market is slow because nobody is interested. You will also think that your agent isn’t performing well, and you may instruct other agents to sell your house. Months will pass, and your home will still be sitting on the market. Your agent(s) will forget about it because it is already an old listing that no one wants to view.
After months or years, depending on how urgently you want to sell, you will reduce the price. But again, nobody will be interested because you are offering a house that has been for sale for so long, and no one wanted to buy it. Buyers will think that there is something wrong with it. Even if you keep on reducing the price, and your home reaches its original market value of 250k euro and appears in buyers’ searches, it will be an old listing.
Eventually, you will have to reduce it even more to generate some interest. In the end, you will have to drop your price below the market value in order to achieve a sale. So, that “smart” advice to list your property high will have backfired on you.
The following story is a typical example of what happens when you miss the golden window in which you can sell your property at the maximum price. Mike and Kate decided to put their house up for sale. They had a nice well-maintained three-bedroom villa. Their daughter got promoted and was spending many hours at her new job position. So they decided to move back to the UK to spend more time with their grandchildren. Mike and Kate interviewed three estate agents and all three estimated the selling range at €350,000 to €375,000.
Apparently, like most sellers, Mike and Kate considered their house to be the best house in the neighbourhood. They had maintained it in pristine condition, and had watched the value of their property going up year by year. Mike was adamant that there must be a buyer who would pay €450,000 for their house. Kate agreed with her husband and she was also confident that there was a buyer who would fall in love with their house and offer them the full asking price. Besides, they were not in a rush to sell quickly, so why not try their dream price?
They decided to list with an agent who agreed with their way of pricing their home. They ignored the most productive agents’ advice and instructed the chosen agent to list their property for €450,000, which he did.
Within the first three days, their agent received five inquiries from people who saw the “For Sale” sign on the property. But, no one was interested in viewing the property when they heard the asking price. Soon after the first month, the agent stopped receiving any more inquiries about the property.
In the meantime, Mike and Kate noticed that two weeks after they listed their property, one more property hit the market on their street with another agent. They checked online and found out that the property, which was similar to theirs, was listed for €375,000. But they thought that their property was better maintained and had a beautiful garden, so they should not worry.
Three weeks later the “For Sale” sign on the other property in their street changed to “Sold.” The purchasers were a young couple named Zena and John who had had their loan approved for €375,000. Zena had found the home by searching the Internet for houses in the area for up to €400,000. Unfortunately, Bill and Kate’s home hadn’t come up in their searches. So, Zena saw the other house on the same street selling for €375,000. They put in an offer of €365,000 and finally closed at €372,000.
Another four months passed with almost zero interest in Bill and Kate’s house. Their agent kept saying that the house had not yet sold because the market was slow. After six months and almost zero interest, Bill decided to lower his expectations and had a meeting with his agent. They both agreed to reduce the price from €450,000 to €425,000.
Another three months passed with no interest. So, Mike and Kate’s house had now been on the market for nine months and no one was interested. Mike decided that it was not worth waiting anymore for the buyer who would fall in love with his house and pay a premium. He dropped the price even more to €380,000, close to the initial agents’ valuation.
Another two months passed with very little interest and just a couple of viewings. The house had been on the market for almost a year and still, not a single offer had been received. They began to realise that they had made a mistake by initially pricing their property too high. Moreover, they were tired and annoyed because it was taking so long to sell their property. To cut a long story short, it took Make and Kate sixteen months to sell their house and eventually they accepted an offer for €335,000.
Zena and John could have bought Bill’s house for €372,000 within four weeks if Bill had agreed to list it at the initial asking price at which it had been valued by the professional agents he interviewed at the beginning of the whole process.
Stories like this are more frequent than you think. Sellers insist on overpricing their homes, believing that a buyer will fall in love with their houses because they are superior to all others in that class. They end up with an asking price well above their likely selling range with almost zero chances of selling.
Buyers search for properties in price ranges
Today, almost every property search starts online. Buyers use a search engine, and then they land on a property portal or on an agent’s website. Website searches are usually done using price range filters. That means that a buyer can, for instance, search for an apartment within the price range of €80,000 to €100,000. Another buyer may search for houses from €300,000 to €350,000. This is an important fact to consider when setting your asking price.
You don’t want to miss a buyer for the sake of a couple of thousand euros on the asking price. That means if you have an apartment to sell and your asking price is €102,000, you will miss a lot of potential buyers. None of the buyers searching online for apartments up to €100,000 will find your apartment for sale. Even though your apartment is a perfect match for that buyer, he or she will never see that your home is for sale. Just a couple of thousands of euros will keep you away from those buyers’ other visible properties. That means you may well miss the chance of selling your property.
If you have listed your apartment for €99,750, that would be more sensible. If your property is priced slightly higher than a popular price range, it will be beneficial to adjust your price and list it at the high end of that price range. Your home will be found more times in property search results, more people will view the details of your home, and you will get a lot more interest.
In addition, many property portals and estate agents use automated property alerts to notify buyers about new listings. Computer software systems notify buyers about new listings that match their requirements. New listings are sent based on the buyers’ budgets, which of course is a price range. This is one more reason to use this strategy. If your home is priced within the higher end of the lower price range, your listing will appear in a larger number of buyers’ inboxes.
And by the way, here is another tip: you should not be afraid of using weird numbers when pricing your home, such as €99,954. It is another way to make your listing stand out.
The quickest way I know to screw up the sale of a property
Many sellers are under the impression that exposure is more important than pricing their home right. Overactive sellers may decide on a price they believe is right, and their next step is to list it with every estate agent on the planet. And because they don’t want to miss a single buyer, they will also post it on every social media platform, classified website, and for sale by owner portal. This type of seller will also print flyers and post them on local supermarket boards and distribute them in every shop in the area. Finally, they will also put a huge ”For Sale” banner on their home for everyone to see.
Do you know why laid back people succeed in selling their homes while overactive sellers fail? The answer is too much exposure. Exposure is like cooking over an open fire. If you overexpose your home for sale, then you will burn it. When you overexpose your home for sale, buyers will see it with every estate agent they visit, on every website they go to, and they will also find it on their social media timeline. They will also see the gigantic banner on your home crying out for attention. Buyers will see that you are trying a bit too hard to sell your home and you will thus give the impression of being a desperate seller. The only thing you can achieve by doing this is a lower sale price, because those buyers will believe that you need to sell urgently. Over the first few days you will probably receive a few very low offers and then all offers will stop because your home will be have been “burnt” by too much exposure.
Agents aren’t motivated to put any serious effort into selling your home when they know that you have it listed with every other agent in the town. They have no reason to spend money and time when they know that at any moment somebody else is going to step in their way. Your effort to increase the exposure of your home to its maximum will have a negative effect on the price you will achieve and probably on the time it takes to sell.
How to make buyers fight for your home
Buyers fall in love with houses like they fall in love with people. Can you imagine what happens to a buyer when they see a property they like?
The idea of owning a new home is so exciting. When buyers like a house, every thought in their heads is about this house. They can’t think of anything else. They keep talking about it, they forget to eat, and they can’t sleep.
Buyers see themselves painting a wall with their favourite colour and start picturing their furniture arrangement. They imagine how they will sit on the balcony drinking beer and watching football. They can’t wait to tell their friends about this house and send photos to their friends and family.
When buyers fall in love with a home, they will stop looking at other homes. They will become possessive. Even if the agent points out a flaw such as “The pool liner colour is faded,” buyers will be angry at him for saying something bad about their future house.
When buyers fall in love with a home, the worst thing that can happen is losing the house they adore. Strange things happen to such a buyer’s psychology. Have you ever wanted to buy something from a shop, only to find out later that it is already sold, and you missed it, to your extreme disappointment? We are all like children; we may have lots of toys, but we all want to play with the same toy that another child is playing with.
A buyer’s need to buy a particular house skyrockets when he or she visits the house and finds out that other buyers are in love with the same house. Then they are ready to fight to obtain the property.
Let me give you an example. We listed a three-bedroom house for €299,000 while the average three-bedroom house in the same area sells for €320,000. Six days later we had three buyers competing for the same house. Do you know what happened? The buyers made higher bids than the asking price, and the house sold within a week for €315,000.
This isn’t a rare example. In fact, even in a slow market, homes can sell above their asking price. A desirable price creates competition among buyers. Price low to sell high.
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