And there you have the $64,000 question…
As a traditional agent I was asked this very question on more than a thousand occasions by would-be sellers – and hold onto your hats – most of the time I couldn’t answer it.
“What?! You say you are a real estate expert and didn’t know how much a house or property would sell for?”
I was in the wrong game – and a mind reading show in Vegas was the obvious next step.
The one thing I did know was the price ‘vicinity’ the property would fall into.
That vicinity was a pretty tight range. To the exact dollar? No!
If I, or any other agent in the country (or planet for that matter), could predict with 100% accuracy what any property would sell for, down to the last dollar, then I was in the wrong game – and a mind reading show in Vegas was the obvious next step.
And the minds that would need to be read are those of potential buyers – the market.
In actual fact, the property market is far more fluid than you might think.
Boy they can be a fickle lot; no matter whether their confidence is sky high or running a bit low.
Buyer sentiment can change overnight based on economic reporting from media, government and financial bodies. In actual fact, the property market is far more fluid than you might think.
The thing that EVERY home owner must understand is that sellers set the price, BUT buyers determine value.
For those clever souls who head down the path of private house sales, there can be a little bit of angst and trepidation when it comes time to determine your ‘list price’. But that is normal, and ‘gut feeling’, coupled with local knowledge, is almost always right.
My finely tuned ‘bullshitometer’ would wail like an air-raid horn.
Now here is a little insider secret:
Everyone who embarks upon selling their own home or property, or hires an agent to help, actually has a pretty good idea of what their home is worth.
When working as a traditional agent I would almost always ask of a prospective seller, “What do you think it will sell for?” Now, if I got the reply, “I have no idea?” My finely tuned ‘bullshitometer’ would wail like an air-raid horn.
Anyone who is even thinking about selling their home or property has a fair idea, usually within a 5% +/- range, of what ‘vicinity’ their property is likely to sell in.
However – even though their subconscious mind knows that level – they are generally sabotaged by their ‘busy, noisy’ mind and premiums of anywhere between 10-20% above real ‘value’ can quickly manifest and hijack the sale process.
The deafening silence of the market is usually an excellent indicator of where your true value sits.
However, its understandable potential sellers are looking for some sort of confirmation of their own expectations and, sadly, agents who feed unrealistic expectations make the job doubly hard for themselves and their clients (sellers).
That doesn’t mean that you, as a seller, should not ‘test the water’ reagrding price, but the deafening silence of the market is usually an excellent indicator of where your true value lays.
Here are three simple steps to getting pretty good idea of what your home or property should sell for:
- Find 3 -5 recent sales within a 1-5km radius of your property, that are of a similar nature/configuration, and have sold in the last 6 months. This your evidence.
- Check out similar properties to yours that are currently on the market and how much they are asking. This your competition.
- Hire a Certified Practicing Valuer to prepare a pre-sale report which indicates who the competition is and the hard evidence you need. No, they are not all conservative and low-ballers – they have to be as accurate as possible to maintain their reputation and career.
Pricing your property for sale is not rocket science, but ‘overshooting the runway’ generally leads to slower buyer activity, longer time on market and eventual frustration.
A little bit of objective research and old fashioned realism can go a long way to success and satisfaction when you sell your own home.