Listing at the Optimal Price Is Key When Selling Your Property
When it comes to selling your home, one of the biggest challenges is determining your optimal list price. While it’s important not to go too low, setting the price too high can turn prospective buyers away—and no-one wants that. You’ll need an experienced real estate specialist to help you get this right.
Here at Storey Collective, our market strategists diligently study and analyze market data. This way, we can draw up a tailored marketing plan for each of our sellers. With a strong marketing strategy in place, our sellers have peace of mind that they’re selling at the right prices. We want to make sure you sell at the highest price possible. But we’ll also make sure you don’t overprice your property and alienate prospective buyers.
Many sellers want to know how a reputable real estate agent determines a property’s price. So, in this blog post, we’ll give you a behind-the-scenes look at how we gauge optimal list prices.
Comparative Marketing Analysis
Before we can determine your optimal list price, we need to complete a comparative marketing analysis. This considers all the factors surrounding your home sale so we can sell your property at the right price. When we’re drawing up this analysis, we’ll always keep two important factors in mind: your property’s market value and current market conditions. These factors are key to pricing and will directly inform your marketing strategy.
The first part of the analysis will examine properties similar to yours that are for sale in your local area. Essentially, these will be your competitor properties—homes your prospective buyers will likely look at alongside yours. The second part of your analysis will examine similar properties that have recently sold. We’ll draw up a clear picture of how the market has valued properties that are comparable to yours.
Current Market Conditions
Once we’ve drawn up your comparative marketing analysis, it’ll be time to look at the current market conditions in your local area. These conditions are also key to calculating your optimal list price.
But what do we mean by market conditions?
Your neighbourhood will be in either a balanced market, a sellers’ market, or a buyers’ market. The state of the market defines the supply and demand in your local area, which, in turn, affects your optimal list price.
In a balanced market, the sales-to-new-listings ratio is between 34% and 54%. This means there’s enough buyer demand to match the supply from sellers. In this case, prices usually stay stable, and most sellers accept close-to-list-price offers.
On the other hand, in a seller’s market, the sales-to-new-listings ratio is 55% or more. This means there are more buyers looking for properties than there are homes for sale. Therefore, list prices often rise faster than the inflation rate. Sellers can often sell for a higher list price than they would in a buyers’ market or balanced market.
And in a buyer’s market, the sales-to-new-listings ratio is 35% or below. This means there are more homes for sale than there are prospective buyers. Buyers have more choice and, as a result, list prices are likely to stall or possibly even decline.
Factors That Affect Market Conditions and List Price
Market conditions tend to move in seasonal cycles. Many buyers house hunt in spring or fall, often leading to a seller’s market during these seasons. Meanwhile, buyers are less likely to look for their next home during summer and winter. You’ll often find yourself in a balanced or buyer’s market during these periods.
Many other factors affect which way the housing market swings, too. These factors include inflation, mortgage interest rates, employment opportunities, construction plans, immigration levels, and government assistance programs, amongst others.
Determining Your Optimal List Price
Once we’ve examined your property’s market value, the current market conditions, and the state of the housing market, we’ll determine your optimal list price. Here’s an example of how this might vary depending on the type of housing market.
In a balanced market, we’d set your list price to match the last comparable sale.
Meanwhile, in a seller’s market, we’d set your list price to match the last comparable sale and then raise the price in line with market trends.
And in a buyer’s market, we’d set your list price in line with the last comparable sale and then lower the price in line with market trends.
For more information on current market conditions and our custom marketing strategies, book a call with a member of our experienced real estate team.
Why Storey Collective?
When you want to sell your house quickly but don’t want to compromise on price, an experienced realtor like Storey Collective can help. First, our market strategists can diligently study and analyze market data to draw up a tailored marketing plan. Then, our certified negotiation experts (CNE®) can ensure you sell your property for the highest price possible.
Having dedicated the last 16 years to closing the best deals for buyers and sellers, we have an in-depth knowledge of neighbourhoods throughout the Greater Toronto Area. As a result, Storey Collective is in the top 3% of 50,000 agents licensed through the Toronto Real Estate Board. In the last three years alone, we’ve also won the Director’s Platinum Award for being in the top 5% of Royal LePage Realtors® and the Award of Excellence for being in the top 10% for five of the last seven years.
If you’re looking to buy or sell in Toronto, the Hamilton/Niagara Region, the Halton Region, or the Peel Region, we can help.