2. Pricing your condo
Pricing condos for a successful sale is never as simple as some might think. Continually changing market conditions and circumstances make pricing a skill as well as a science. A market shift underscores the importance of pricing.
The essence of pricing it right is identifying the right comparable properties. There are a number of factors to consider, including location, size, amenities and condition. Then you must factor in what has sold (and why), what is currently under contract, what is active on the market, what has been removed from the market that didn't sell and where the market is heading.
Factors that don't affect the price are sometimes difficult to accept and include:
What you paid, what you need and what you want are not relevant to today's market value. Unfortunately, many sellers will incorrectly base their price on what they paid and see their home sit on the market. The real estate market works like any market and is pulled along by the forces of supply and demand. Like any free exchange market, the market cycles between a buyer's market and a seller's market.
Half of all marketing is setting the right price. If it is priced too high,
it doesn't matter how much it is marketed.
Establishing Market Value
The market value of your property is determined in exactly the same way as any other commodity – what a buyer is willing to pay for it in today’s market. Despite the price you paid originally, or the value of any improvements you may have made, the value is determined by market forces. Here are some of the factors that affect the value of your condo:
Location - Is your condo in a desirable location? Is your condo near the metro?
Competition - What are other comparable condos in the area selling for? We will evaluate active, pending, sold, and expired listings from the past few months.
Supply and Demand - How many condos are available for sale in your area and in your price range? If there are many, you may need to lower your price to attract a buyer. If there are few, you can likely raise the price and still find a buyer.
Mortgage Market - What are the current mortgage interest rates?
Economy - Is the economy strong or in a recession? Just as important, what is the perception of the future economy.
- Condition - Have you kept your condo in good condition? Is it in move-in condition for a potential buyer, or will they need to make repairs before moving in?
"There are two types of listings - those that sell and those that help other listings sell."
Selling Price vs. Timing
Setting the right price at the start is important because you will get the most traffic and visibility in the first few weeks.
What is a CMA?
The best method available to home sellers to learn their home's current value so they can select the best sale price is a CMA, or Comparative Market Analysis. A CMA is the term real estate agents use when they conduct an in-depth analysis of a home's worth in today's market. A completed CMA is presented in the form of a report, which includes the selling price, detailed information about your home, and the comparable properties that were researched to determine its value. Because the price derived from a CMA is somewhat subjective some agents may include brief statements on the perceived selling points your home.
Thinking of selling? Contact us for a free CMA.