It’s like clockwork: the real estate market will spike each year in the spring. In April and May, as the snow melts and the weather improves, buyers start to look for their next home, and sellers prepare their home to make the best possible impression.
This year, however, the number of houses available on the real estate market is very low - about 10% below the ten-year average. More than in previous years, the current real estate market is a true seller’s market. Houses are being sold for record prices, often well above the asking price. It’s a stressful situation for buyers, but also for sellers who are often at a loss deciding on a pricing strategy to adopt.
The Linda Maguire Team (Royal LePage Burlington real estate agents) can assist you in selling your home in the current market with steadily-rising house prices. First we’ll help you predict the market value based on recently sold properties in the same location, and with similar features. Then we’ll help you set the pricing strategy. There are essentially two strategies that you can adopt to realize the highest possible value for your home:
- List your home above the predicted market value and hope a buyer pays that price
- List your home at the predicted market value and hope to get multiple bids
Below we provide some insight in these two pricing strategies available to sellers:
1. List your home above predicted market value.
Many homeowners feel that there is an opportunity to “cash in” with the unexpectedly high prices being paid for real estate. It is an often chosen strategy with the current shortage in the supply of houses. However, in this current spring market, buyers have generally been oddly unwilling to even approach a home that is clearly priced well above market value. Educated buyers, especially those working with a realtor, have easy access to all relevant information on the internet. They can assess the fairness of the price of a newly listed home, and sit back and wait for an overpriced home to be reduced in price. This pricing strategy can therefore backfire, when a house “sits on the market” for an extended period of time. Buyers then begin to wonder if there is something wrong with the house. It creates a very real stigma for the home, so much so that homes priced with this strategy often sell for less than their true market value, and certainly far less than the original list price.
2. List your home at the predicted market value
Even in a seller’s market it often makes good sense to list a home at, or just slightly above, the predicted market value. The best way to find out the predicted market value is working with an honest and experienced real estate agent, who is familiar with the specific area in which the house resides. The advantage of a local real estate agent with a lot of experience in the neighbourhood of the about-to-be-listed house, is that the realtor will likely have been inside of comparable homes which were sold recently. Very often homes that look similar in size and condition on the outside, or through real estate photos, are in fact very different in terms of quality of finish on the inside – the extent of the impact can be several hundred thousand dollars! So an experienced local realtor can present an objective listing price recommendation.
Holding off offers for a few days after the initial listing date gives your home a chance to be viewed by the most ideal potential buyers (as those are the ones who will view it first) and their realtors, and, in a spring market, delaying acceptance of offers will often attract multiple bids. In situations where there is competition among buyers, sellers often realize sale prices that 5-10% above their asking price.
The spring 2016 market is unusual. Currently there is an historically low shortage of available listed homes. In competition, buyers will jump at the chance to overpay for a home listed at close to market value. But they often won’t even bid on a home that is listed too far above market value.
The Linda Maguire Team Seller Services
The award-winning Linda Maguire Team works with you through the entire home buying and selling processed. We prepare a thorough market analysis to help with buying ad we visit the inside of comparable hoes. We also help with the selling strategy, and will help prepare your home with active staging services to maximize selling price. We’ll guide you through the processes every step of the way.
About The Linda Maguire Team
The Linda Maguire Team are Royal LePage Burlington agents who are highly experienced and dedicated to their clients and their needs. The Team consists of Linda Maguire, Brian Maguire, Elaine Blamauer and Cathy Buttrum. Contact these Royal LePage Burlington real estate agents today!