Determining the right selling price for your home can be challenging, especially if you're handling the process independently. To ensure a successful sale without complications, it's crucial to avoid certain mistakes.
If you want to sell your home soon, you probably have a very long to-do list to manage! From packing boxes to scheduling meetings with the notary or your real estate broker, and coordinating your move, one essential task is determining the right selling price for your home.
To be able to establish the market value of your home and to find the ideal selling price, what are some of the mistakes you should avoid? Let’s see!
1. Determining the selling price based on the purchase price
When preparing to sell your house, it’s understandable to have a target selling price in mind. However, it's crucial to align your selling price with current market conditions to ensure its competitiveness and appeal to potential buyers.
In a buyer's market, where buyers have numerous choices, setting a price that reflects this reality is essential. Overpricing could mean missing out on valuable opportunities, unlike in a seller's market where the dynamics might favour a higher price point.
2. Using your neighbours' selling prices as a guide
Some homeowners initially look to their neighbours' selling prices as a benchmark when listing their own property. While location plays a role in determining value, it's just one factor among many. Your neighbour's success in achieving a favourable sale price can be influenced by various aspects beyond its location.
Instead, a more accurate approach involves conducting a comparative analysis (comparable analysis). This method considers a broader range of factors to make a meaningful comparison between properties. Key factors to consider include:
- Size of the property
- Type of property
- Size of the lot
- Year of construction
- Number of floors
- Renovations and upgrades made
3. Assessing the value based on its sentimental value
It's natural to attach sentimental value to a home where you've spent many years, especially if it holds significant memories. However, sentimental attachment should not help determine the selling price of your house.
To determine an objective and realistic selling price, it's essential to consider the factors mentioned earlier or seek the expertise of a professional appraiser.
4. Setting the selling price according to profit
When selling your home, aiming for a profit is natural. However, setting your home’s selling price solely based on the profit you hope to gain may lead you astray.
Relying on subjective evaluations rather than objective criteria could result in overpricing, making it difficult to attract potential buyers. This scenario can hinder your selling process and is far from ideal.
5. Estimating the sale price of your home based on the municipal evaluation
Another common mistake homeowners make is using the municipal evaluation of their home as the basis for setting their selling price. However, this approach is problematic because municipal evaluations are conducted only once every three years. Moreover, there is typically an 18-month delay between when the assessment is conducted and when it affects property taxes or other official purposes.
Relying on a municipal evaluation as a basis for your home's selling price isn't advisable due to this lengthy period. Indeed, a lot can change during this time, such as renovations you've undertaken, fluctuations in interest rates (which can affect property values), or advancements and developments in your city that can impact the market value of your property.
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