One of the most important factors to consider when putting your home on the Nanaimo real estate MLS is the list price. But surprisingly, it’s also one of the things that many sellers pay the least attention to.
Here are the best tips on how to choose the right list price for your home.
Is list price the same as sales price?
First things first. A common misconception among sellers is that list price is the same thing as sales price. In fact, the two are quite different. Think of your list price as the price you’d like to get, and the sales price as the one you’re completely satisfied with. Remember that setting the right listing price is a mixture of both science and art. Your real estate agent in Nanaimo will pull market comparables of recent and pending sales, and active listings, of houses that are similar to yours. Then, she’ll factor in the value of recent updating and improvements, and the curb appeal of your home.
Why listing price matters
The window of opportunity to sell your home fast is the first few weeks that it’s on the market. If your home has too high of a listing price the result will be fewer showings and prospective buyers. It’s true that you could always lower the list price at some point, but by then demand and interest for your home will have dramatically declined. Sometimes sellers think that setting the listing price low is good because they’ll receive multiple offers with buyers getting into a bidding war. That may or may not be true. What is true, however, is that if you set the listing price of your home too low buyers will:
- Think there’s something wrong with the house so they won’t even both looking at it
- Believe that you’re a distressed seller and make offers well below your already low listing price
5 steps to choosing the right list price
The basic steps to choosing the right list price before putting it on the Nanaimo real estate MLS are:
- Reviewing comparable listings and sales in your immediate area
- Analyzing the sold comparables and comparing the ratio of sold price to list price
- Looking at withdrawn and expired listings to find homes that were overpriced
- Pulling pending sales and active listings for the best ‘real time’ pricing data
- Determining the asking and selling price per square foot, keeping in mind that sometimes smaller homes may have a higher price per square foot
Main factors that influence list price
There are four main factors that influence the value and list price of your home. The first two factors you can’t control, while the last two you have total control over:
Your home’s closeness to schools, amenities like shopping and entertainment, and whether your home is in the middle of the block at the end of a quiet cul-de-sac all affect list price. Other location factors that have an influence on home listing price include the reputation of the neighborhood, the economy and job growth, and crime statistics.
#2 Market comparables
Comparables are homes very similar to yours that have recently sold, are under contract with sale pending, or are actively listed for sale. MLS comps also provide valuable market data such as average days on market and listing vs. sale price.
The condition of a home has a major impact on list price. For example, if a buyer has to spend tens of thousands of dollars replacing the furnace or the roof then the list price will have to be lower to attract qualified buyers. Houses in poor condition will also appraise for less. So, even if a buyer and seller agree to a price, if the property doesn’t appraise the buyer won’t be able to obtain financing and your deal will fall apart.
#4 Updates and improvements
Making minor repairs and updates, renovating and remodeling, and repainting can have a major affect on list price. Even though most improvements only return between 50% to 70% of the money spent, they can still be valuable to the right buyer.
The right list price attracts the best offers faster
It’s always better to choose the right list price for your home from the start. You’ll get a steady stream of prospective buyers looking at your new listing and have a quicker sale.
Other key takeaways for setting the right listing price include:
- Listing price is what you’re asking, sale price is what you’re happy to accept
- There are 5 basics steps to follow when choosing the right list price for your home
- Main factors that influence list price are location, market comparables, condition, and updating