Real estate transactions, particularly for first-timers, can seem complex at times. We shed some light on the topic of asking price and debunk some of the widely accepted myths surrounding the sale of homes in the property market.
It is a common misconception that sellers set the asking price when in reality other factors like a property's location, size, condition and the market also come into play when the asking price is being determined. A knowledgeable property professional will also be able to determine how in demand your property will be in the current market - if buyers perceive the home to be priced at fair market value, they will be much more inclined to buy than if it is not.
While using property portals to get a general idea of the market, setting your asking price solely based on what you are seeing on a property portal is not advised. There are too many factors and variables that goes into pricing a property that you will only harm your selling chances by doing this.
It is therefore not only advisable to rather work with a local property professional that not only knows your market well but can also use a comparative market analysis (CMA) to help you determine your property's asking price accurately.
This is probably one of the most longstanding myths when it comes to selling your property, the fact of the matter is that overpricing your property will drive away potential buyers.
Your inflated price will alienate all kinds of buyers. Those able to afford your inflated asking price will eventually recognise that your home offers less than other homes in the same price bracket, and those that would be able to afford it at the correct asking price won't even try to buy it - why invest time and energy into a property they think they can't afford?
Correct pricing from the start ensures optimal market engagement and a fair selling price.
What to do if your home is overpriced
Before working out what to do when your property overpriced you need to determine if your home is truly overpriced. Here is how to tell if your property is overpriced:
Now that you have answered these questions you need to work on a plan of action.
Myth 4: Renovations guarantee increased home value
While some renovations will increase your properties resale value, not all will. If two identical homes enter the market, but one has a updated kitchen and bathrooms the one with the more modern finishes will sell quicker and for a higher asking price than the one without.
Understanding what types of renovations and upgrades will help your home sell quicker and at a better price is vital and talking to a property professional that understands the local market and what buyers are looking for in your area will help you work better when planning projects.