The price of a property plays a very important role in a real estate transaction. Like any other trader who scouts for a customer to sell his merchandise for the best price, a person who puts his real estate property for sale will also want to fetch the best price for which it could be sold. It is generally found that people realize how hard it is to set the price for the property, only when the final decision to sell the property mis made. It quite usual for a first time real estate seller to become nervous while making a decision on setting the price of the real estate property. This is mainly because many factors used for setting the price of other products cannot be applied to fixing the price of real estate property. Additionally emotions come to play with the decision making process as this usually is one of the most important transaction in one's life.
First step to take while making a decision on the price is to think from the buyer's point of view. Think like "What will you do if you were a buyer approaching the owner of your house to buy the property?" At first it will be difficult to switch your mind so as to view from buyer's perspective. It is a fact that no individual could exactly think like a different individual. But the basic premise of thoughts could be emulated to a large extend. For example, look for various sources of information on assessing the value of a property. You can search the internet, go through different real estate sites that lists 'FSBO' ( for sale by owner ), sites of real estate agents in your area etc. You could also consult friends and relatives who might have recently made or know some real estate transactions recently made in their neighbourhood. By gather information from such various sources, you gradually will understand how a buyer will be looking for the best options to negotiate in order to cut a deal with the seller. Once you are able to think like a buyer to assess the value of the property thing will get easier.
'Comparables'
First factor to consider is 'comparables'. 'Comparables' in real estate parlance are those properties similar your's which were either recently sold or currently under sale agreement. More close a comparable is, the more similar will be its price to the price that could be set for your property. In addition to plot size, square feet of the building, finishing, flooring, property condition and neighborhood which are the immediately noticeable features for comparison, age of the property also plays and important role. Property value decreases with age of the building. Among the aforementioned factors, the importance of the condition of the property can't be stressed enough since it plays a major role in influencing the decision making of the buyer. This includes switches, sanitary, drainage etc. So while browsing 'comparables', check if any issue pertinent to property condition is impeding its sale and see if the same issue exists in some form for your property. Also note down any striking features that could be applied to your home for sale at a minimal cost so as to improve its 'curb appeal'. Similarly inspect every nook and corner of your house as if you are a buyer to make sure every thing is working well.
Market conditions
Like any product put for sale in the market, price of a real estate property largely depends on market conditions. Basically price of any commodity is based on demand and supply. So this means even if you find a close match 'comparable' which matches almost all factors mentioned above, the price your property could get could vary from that of it. For example, if the market conditions has improved in the seller's point of view, like if there is a recent spurt in demand after that 'comparable' was sold, you could get a better price. Similarly if the market has become sluggish, with a decreased number of buyers compared to the number of properties currently available for sale, you will be at the receiving end with the buyer having an edge for bargaining with more choices available.
Time constraints
If you realize that you will not get the desired price for the property you set based on 'comparables' because of the altered market conditions, you are left with 2 choices. Either you sell your property for the best price possible in the current market conditions or you can wait till the demand increases. Unless you have any pressure of liabilities its always better to wait for the market to improve to get the best price. But in most cases buyer would be looking to get the property sold as fast as possible. In that case you will have to act fast and 'prepare' the property for sale. You should also decide upon the lowest price you could accept and put your property for sale for a price with enough room for bargaining so that it will not go below the lowest price you could accept. Keep that price just in your mind without publishing it.
Prepare the property for sale
First task in preparing a house for sale is to improve the curb appeal. Paint your home with the trendy colors so as to impress a buyer in the first visit. Do any maintenance that is immediately conspicuous so as to avoid a buyer from having a second thought because of it. Avail the service of a professional home inspector to check everything is fine in and out and carry out the repair works based on his recommendations. Most buyers employ a home inspector to check for any repairs before they sign the deal with the seller, so if you leave this possibility it will later prove to be fatal with the buyer using them as arguments for bargaining or even backing off from the deal.
Employ a 'realtor'
A 'realtor' is a real estate agent affiliated to the MLS in your area. Although it is not mandatory to use the service of a realtor, most transactions started without a realtor(FSBO) ends up in using one of the realtors for the sale to realize. By employing a realtor you are assured of getting proper guidance for every aspects of the transaction. Additionally he/she along with all the realtors enrolled with the local MLS will promote your site as everyone will benefit from the transaction. Thus you will be able to make a realistic sale offer based on the prevailing market conditions. Employing a realtor also relieves considerable burden of marketing from your shoulders. Further the realtor will act as a mediator in negotiations with buyer. Additionally a realtor will help in getting right professionals to carry out peripheral tasks of the transaction like attorney, home inspector, relocation agents etc.
Be prepared for negotiations
Final step before finalizing a deal with a buyer is to be ready for negotiations. All buyers will bargain and tend to project the draw backs of your house in order to lower the price. So be aware of the plus and minus aspects of your house and neighborhood. By highlighting the strengths and euphemistically countering the drawbacks, you could carry out the negotiation in an impressive manner. At any point of time you should be careful not to let the buyer bargain below the minimum acceptable price you have etched in your mind.
Never be a vulnerable
If one or two buyers says that they are pulling out because the price is too high, don't make a hasty decision. It could be a ploy to slash the property price. Or they might have made a decision to buy another property. Review the factors you considered while you set the selling price of the property, check with your realtor if the property is over priced in current market conditions. Be patient to see if there are more buyers approaching you. Only after a thorough analysis, should you make a decision on altering the selling price of your property. In short, never be a vulnerable seller who could be easily taken advantage of by a buyer.
Hope you have a basic idea regarding how to get a fair price for your property. I will explain some of the points that need further explanation in my subsequent articles.
