When it comes to selling your property, one of the trickiest tasks is pricing it right. Nobody wants to price their property too low, but pricing it too high carries risks as well. If you’re wondering how to price your home for sale, keep reading. Here are our top tips on pricing it right to sell for the max, based on our years of experience in apartment sales!
How to price your home for sale – the basics
The price you list your apartment for is a determining factor of the time your property takes to sell. To strike the perfect balance between the price and the timing is often the greatest challenge for property sellers. If you price your apartment incorrectly, it might languish on the market for a long time!
This might happen in cases where:
- You price it higher than it was valued at the previous year without any formal evidence of market growth.
- You want to receive more than you owe on the property, and ultimately, more than it is worth.
- You choose the pricing compared to other apartments in the vicinity and feel yours should go for more.
- You compare similar apartments but at different locations.
It pays off to find out your home’s current market value as accurately as possible. The fact of the matter is buyers are only prepared to pay today’s market value for your apartment.
Many factors influence property prices, but the two major ones are:
Rental Demand: This is where more people want to rent in your suburb than there are available properties for rent. Not only does this drive rental prices up, but also property sale prices, because they can command more rent for their owners.
Supply and demand: Sales demand occurs if there is a high demand for your area and your type of property, and fewer properties are available for sale. There are likely to be more buyers than sellers in this case; hence, a high sales demand which in turn drives prices up and vice versa.
You need to accurately determine both, and to do so you must thoroughly research the market conditions of your suburb. The newspaper or real estate listed prices might be misleading since they don’t offer all the information you need to set a proper price. Usually, they contain only 20% of the information you need to price your home for the best result. The prices might not be accurate, and you end up falling into the same hole of mispricing.
How to Price your Home for Sale in 4 Steps
Step 1: Research Sales Demand
There are many data sources you can use to determine the market conditions of your suburb. Some are free and readily available, while others are available for a fee, but can be an excellent investment. This may include specific sales records for your complex.
You can consider starting by consulting some of the following sources:
- Property Value – Property value is part of the ‘CoreLogic’ company but tailored for the public. This site provides many similar reports to APM (Australian Property Monitors), and it also integrates maps for a view of your area when pricing comparable properties.
- Local and Regional newspapers – There is a real estate section in most newspapers, and many have apartment sections. They list all the recent sales results for the area or suburb. This up-to-the-minute data can take up to three months to reflect in official databanks, many of which require payment to access, and is of great value.
- Australian Property Monitors – This site features a ‘Home Price Guide’ section for sellers. You can view price history by street, the postcodes, current price estimates, a 10-year price trend, and even a price forecast for your property.
You might also consider researching some properties on the market that are similar to yours in terms of location, features and presentation. Take interest in:
- Their pricing now.
- The price when they first listed.
- Their duration on the market.
- What interest levels the buyers have and what offers, if any, have been made.
- The marketing strategy used.
If you still need more information, you can even call the real estate agents in charge of the properties for more information. You could even take the time to inspect some of them.
Step 2: Research Rental Demand
Rental vacancy rates for a suburb or complex is what indicates how much demand there is in an area. However, proper research should be done, and accurate data analysed before settling on your selling price.
This is how rental demand can impact property prices within your area although there could be other factors at play:
High demand: When the rental demand is high, the properties rent within one week. The greater the competition for your kind of property, the higher the price people are willing to spend on it. In this case, your apartment can definitely be priced high.
Medium demand: When there is medium rental demand, the properties rent within four weeks. You can expect a timely sale if you list your property at market value. This means the price must be just right for your kind of property.
Low demand: This is where properties take more than four weeks to rent. You risk your apartment sitting on the market for a long time if you price it even slightly above market value. It usually even goes slightly below, just to attract more people.
To get more information, call three real estate offices in your area. Ask them about the availability of rentals and demand for your type of property. The data you gather will give you a rough idea of where your property stands and offers a starting point for talking marketing with your agent. It is ideal to price your home within 10% of its market value as indicated by the data.
Step 3: Seek Advice
After doing your research and getting a rough idea of what your property might be worth, it’s advisable to hear what other people have to say. Approach people who are experienced in real estate, professional or otherwise!
Get an independent valuation of your apartment to help you make your final decision on price. Take in suggestions about what might enhance your property to increase its value.
If using an agent, ask them to complete a comparative market analysis for your property. In it, the agent should show the price range in which they believe the property falls. Encourage them to back up their data with evidence just to be on the safe side.
Step 4: Make a Decision
After all is said and done – and no matter what anyone tells you – your sale price is up to you. You alone decide the price you want to go to the market with. However, it’s of utmost importance to take into consideration the results of your research and the professional advice given. If you choose to ignore these findings in favour of your ideal price, you risk losing money and time before you make a sale. Don’t just hope for the best basing your price on luck!
Several factors contribute to this. They include:
- A freshly marketed property attracts peak interest. It’s at this stage you can take advantage, and with the right pricing, make a quick sale.
- If your price is unreasonable from the outset, you scare buyers away and waste significant marketing dollars. Your property takes more time on the market at the risk of losing value.
- If you miss out on a sale in the early stages, you will most likely need to reduce your price. This leads to spending more time and money on marketing to make buyers aware of the change.
There are buyers eagerly waiting to own an apartment just like yours right now, for the right price. So, if your price reflects today’s fair market value, you can expect competition for your home. If you price your apartment at the right market value, you need to add as much extra value to it as you can to give it the upper hand over the competition.
If priced more than 10% above market value, most buyers are likely to pass it by, fearful of paying too much. Eventually, your apartment will sell, but only after buyers exhaust all other cheaper options or feel the urgency and competition to do so.
The trick is to sell your property as quickly as possible. When similar properties at more affordable prices come up for sale, there is a real risk your property will sit on the market for a very long time.
Still not sure how to price your home for sale? We can help?
Do you need assistance with pricing your apartment right for the best possible sales outcome? The team at Amazing Apartments is here to help – we specialise in helping you sell your apartment to the right buyer, at the right price.