Name your Price

If you are selling your home by private treaty, the most important decision you will need to make is what price to put it to the market. Even if you are to sell through Auction, you will need to establish your reserve price.

Setting a realistic price will ensure you obtain your asking price (or close to it) and also conduct the sale promptly. When determining a sound price you should:

• Arrange an Appraisal,
• Examine a Comparative Market Analysis,
• Consider Market Conditions, and
• Estimate your Net Gain.

Arrange an Appraisal

An appraisal is performed when a real estate agent inspects a property for sale to estimate its value. Many real estate agents will conduct free appraisals in the hope that you will choose to let them act as your exclusive agent.

Prior to appraisal, the majority of sellers will have a price expectation that is 5 – 10 % above the realistic market level. Keep this in mind when assessing whether an agent is over-pricing your property.

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Examine a Comparative Market Analysis

Determining what the public has been willing to pay over recent months for properties similar to yours (i.e. similar condition, style and locality) is another important factor to consider when setting your price.

Your real estate agent should have access to this information, often referred to as a Comparative Market Analysis (CMA). Comprehensive CMA’s will also include data on nearby houses that failed to sell, along with the prices they were listed at. Ask your agent to review a CMA with you to support the market price he/she recommends.

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Consider Market Conditions

A Comparative Market Analysis will often include data on the number of days each comparable house was on the market prior to being sold.

When the real estate market is booming and property prices are on the increase, houses can sell in only a few days. Alternatively, if the market is slow, the average time for houses to be on the market can be several months.

Your real-estate agent will be able to tell you whether the area in which your property is located is experiencing a Buyer's Market (i.e. slow period) or a Seller's Market (i.e. boom).

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Estimate Your Net Gain

When you are satisfied that you can reasonably estimate the market value of your property, you can next assess the net gain you are likely to receive if you sell.

To do this you will need to determine the fees and costs associated with the sale of your home. These expenses should then be subtracted from your estimated sales price. Some of the items that should be considered include:

• The Agent’s commission,
• Marketing/Advertising fees,
• Solicitor’s Fees/Conveyancing costs,
• Improvement expenses, and possibly the
• Amount you will need to payoff your present loan(s).

Now it’s time to get the house ready for sale.

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