6 Mistakes to Avoid When Selecting Your Asking Price

Posted by Ambergate Realty Advisors on Wednesday, May 25th, 2016 at 10:46am.

Did you know there’s more to selling a home than just the price? There are 7 other factors you should consider if you are to be successful.

However, your asking price will be used as a filter by prospective buyers when deciding if your home makes the shortlist or not. If you get no showings, or if you get lots of showings, the message is the same ie “thank you, but no thank you”.

Let’s consider a few errors most homeowners make when calculating an asking price.

1. Pricing against unsold homes

Do you want to sell your home or have it “on the market”?

Too many folks look at what’s for sale and price against those homes. Don’t do this. Price your home against those homes that have actually sold. In the Edmonton area market, the average differential between asking price and sold price is about 3%. At the time of writing, the average selling price for a single-family home in Edmonton is $433,000. How much better would you do if you put the discount right on the front? You would beat out your competitors and likely get multiple offers, some of which would be ABOVE your asking price. The best value homes always sell first.

2. Believing the tax assessment

Don’t place too much credence in the assessed value of your home when thinking about selecting an asking price. The sole purpose of providing you with an assessed value for your home is so that you can be taxed on it. The values are calculated on a computer using a generic algorithm. One of our dear clients has worked on that computer system and he tells us that that an acceptable level of inaccuracy is 2.5% above or below the most probable selling price. The City of Edmonton has put together some fun videos to explain the process. We have helped people sell homes for far more than the assessed value and sometimes homes sell for far less. We helped a client purchase a home in Highlands last year. We negotiated a price $115,000 BELOW the assessed value. Don’t use your assessed value to select your market price. They are NOT connected.

3. Thinking you will get every dollar back for improvements or renovations

What’s the best reason to renovate a home? To improve it for your own enjoyment. Those “fix it and flip it” programs you see on television are simply a myth. With the exception of painting your front door, most renovations deliver only a partial return on every dollar invested. Just like your car, your new kitchen, bathroom and roof etc. will depreciate over time. As a rule of thumb, count on a 50 percent to 75 percent return for every dollar you spend. Here’s a link to handy renovations report you may find useful: Renovation Guide. A local Edmonton based appraisal company Harrison Bowker produces this report every few years and it’s very helpful.

4. Pricing for what you need

So you owe a certain amount to the bank, you borrowed some money from your brother, perhaps you would like to gift some money to your children, or there is that credit card to pay off. Guess what? Home buyers, ie the market, won’t care less about these things. If you don’t price to the market, your home will simply be ignored.

5. Not listening to the market

Don’t count on feedback from buyer agents. This just won’t help you. You will do far better if you allow your chosen real estate professional to provide access to quality market data and to help you interpret this data to understand the mood of the market as it waxes and wanes.

6. Staying rigid

In order to witness success, most home sellers need to make changes to their asking price after a short period of time, if no offer is forthcoming. How soon? A price change after the first 15 days and every 15 days thereafter would be wise, until you get an offer, or better yet, multiple offers.

Want more information about our discount and flat fee home selling programs? Please feel free to call our broker-owner Stuart Neal at 780-760-2014 or visit www.LowestRealtyFees.ca

Lowest Fees & Best Results,

Superior Realty Services from $4500

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