How do we determine an appropriate list price for a home?
Hello I am Emily with Crosstown Marketing Group at Sutton Centre Realty and I am here to answer the question, “How do we determine an appropriate list price for a home?”
We start by researching. We are looking for homes that are active on the market that will be your competition. And then we are looking for homes that have already sold which will show us what the market was willing to pay for a home that was similar. We are looking for the Floor Price of the Actives and Solds as well as the Ceiling Price for both.
So let’s look at an example. Let’s say you own a house in Willingdon Heights in North Burnaby on a 33 X 122 lot. It’s a Vancouver Special, no major updates but a few upgrades here and there. We are going to be looking for comparables that match that criteria, these are your competition. First we look for a floor price in the land value range – let’s say there is one listed for 1.28 million. Then we find a ceiling price for a home that is listed at 1.75 million on a larger lot and a slightly nicer house. Then we look and see there is something in the middle at 1.699 million and it’s only been on the market for 2 days so we are going to be monitoring that heavily to see what they do while we are in the listing process.
Then we want to take a look at the sold prices. That will determine what the market and people have actually been willing to pay for homes like yours. So let’s say that the cheapest property was listed for 1.99 million and sold for 1.25 million. That was just lot value – the absolute bottom, so that will be our floor price. Then let’s say there was a slightly larger lot, 50 X 122 and it sold for 1.70 million which will be our ceiling price. We know we are not going to be up that high because our lot is smaller. Then let’s say that the best comparable we can find with the same lot size and a very similar house, sold for 1.498 after being reduced from 1.590 and then reduced again to 1.545 million.
As you can see it is pretty easy to determine where we want to be list price wise.
So our recommended list would be right around 1.498 million.
In summary, if you are thinking about selling your home, give us a call to talk about how pricing can be an effective tool in selling your home for the most amount of money in the shortest amount of time.
I am Emily with Crosstown Marketing Group and I talk Real Estate.