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What to Know About Under and Overpricing Your Home

Mar 31, 2023  
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Although location plays a significant role in determining North Calgary real estate value, it is only a part of the equation. Other crucial factors include square footage, style, and amenities. When setting a price, sellers must consider all of these elements and determine a fair price based on current market conditions.

Underpricing may occasionally spark a bidding war in a hot market, but it is a risky strategy. Overpricing, on the other hand, often leads to a longer time on the market and may require the seller to reduce the listing price one or more times. Here are some tips to help sellers set a price that will attract competitive offers from buyers:

First, Do the Homework

To determine whether a property’s price is realistic or not, it’s essential to stay informed about the competition. Real estate professionals use “comparables,” which refer to statistics about homes that have been listed, sold, and closed within a specific time frame. Local multiple listing services maintain information on listing and sales prices, total days on the market, square footage, age of the house, construction type, number of bedrooms and bathrooms, and specific location or subdivision. These statistics may also include details about assessed value, property taxes, and any improvements or issues.

Although this information is crucial for pricing a property, the data only reflects what has already occurred. In a stable market, this is helpful data. However, in a volatile market, statistics from the past six months may not be reliable for the next quarter. In extreme market conditions, such as an overheated seller’s market or an unusually slow one, it’s challenging to predict what a reasonable price might be.

Put Aside Emotion, Rely on Facts

in order to successfully sell a house, it’s imperative for the seller to assess their property’s strengths and weaknesses in comparison to other homes in the community. This can be achieved by visiting other homes either in person or through online listings, making note of the desirable features and attempting to recreate the look and feel of the spaces that evoke positive emotions. Hiring a professional stager can also aid in presenting the home in the most favorable light, attracting a broad range of potential buyers.

Negotiation is a critical component of the selling process, and sellers should be aware of their bottom line while being open to some pricing flexibility. Pricing a home excessively high can deter potential buyers and may fail to attract any offers.

To ensure a successful home sale, it is recommended that the seller interview multiple real estate agents if they lack confidence in selling their home independently. The home-selling process can be stressful, but an experienced agent can assist in determining the best price for the property, avoiding the risks of overpricing or underpricing. In a fluctuating market, appropriately priced homes can attract multiple offers and sell for more than the asking price.

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