Does pricing a London, Ontario home a little high so you can come down in price work? I hear this all the time from home sellers: “Let us list it high because someone will offer us less”!
That thinking worked years ago, but in today’s real estate environment, homebuyers have a tremendous amount of information at their fingertips with just a few clicks of the mouse. Today’s buyers know prices, and if you list a house or condo for sale in London, Ontario, at too high a price, it could cost you.
The Price
When a home seller interviews a Realtor, it’s easy to get caught up in the excitement of choosing a sales price. If a seller can obtain a higher price for the home, it means more financial opportunities for them. Unfortunately, uninformed sellers often choose the Realtor who tells them they will list it at the highest list price or, worse, the lowest commission. This is, by far, the worst mistake a home seller can make.
Establishing Value:
The reality is that it doesn’t matter how much money a home seller thinks their home is worth. The only person whose opinion matters is the buyer who will make an offer, and, of course, the appraiser. Pricing a house is part science and part art. It involves comparing similar houses in the neighbourhood and making the necessary adjustments for the differences between them, charting market movements and measuring the amount of housing inventory, all of this in an attempt to help determine a range of value. This is the same method appraisers use to evaluate a house. No two appraisals are the same; they are, however, generally close to one another. There is no hard and fast way to determine a price for a home in London, Ontario, and the surrounding area.
Is the Price Too Low?
Houses sell at a price a buyer is willing to pay and a seller is willing to take. If a house is priced too low, the seller should expect to receive multiple offers and drive the price up to the market value. There is little danger in pricing a home under its actual value and that of your competition. The danger is pricing a house or condo too high and having it sit on the market for weeks, even months.
How It Starts To Go Wrong
The home seller did not interview more than one Realtor. They may have chosen the first Realtor they found on the Internet because of their very low commission fee, or a friend or coworker had recommended them. The first Realtor priced their house at $795,000. After 90 days of sitting on the market, the listing expired.
It Continues To Go Wrong
The following Realtor they hire goes and lists the house for $775,000. A few weeks pass, and eventually, the price drops to $765,000; however, no offers are made. A few people looked at the house, but no serious buyers came forward.
The Home Owner is Now Tired & Exhausted
The home seller and the Realtor then priced the home at $737,000, and it sold very quickly. The sad part is that the comparable sales in the neighbourhood fully justified a price of $755,000, but the home had been on the market for too long at the wrong price, and now the market had slowed.
Protect Yourself
The question is, how much money does an expired listing cost the homeowner? The financial losses often exceed the extra mortgage payments made and extend beyond the cost or hassle factor of trying to keep a home spotless during the listing period. It affects the value that a buyer ultimately chooses to pay because it is no longer a “fresh” listing. It’s now stale, dated, a home that was overpriced for too long.
Don’t let it happen to you. Don’t be that seller of an expired listing. Be sure to hire a professional Realtor to price your home correctly from the beginning.