Pricing your home is both an art and a science. It is probably the most important decision you and your Collingwood REALTOR® will make. To be comfortable setting the listing price for your home, consider these key factors first.
1. Imagine You Are The Home Buyer -- Most of todays home buyers will look at your home with impersonal and calculated eyes. They will not have an emotional attachment or your personal interests in mind when they make an offer. Regardless of weather the overall market favours the buyer or seller, the buyer will want your home at a fair market price. They are not considering how much you paid for the home, the value of the memories that you have in it, how much cash you need for to close on your next home, or how much time and money you have invested in your home's landscaping, bathroom updates, painting or other improvements. When you first decided to place your home on the Collingwood real estate market, it is no longer your home. It belongs to the buyer with the best offer for you. Emotional detachment from your home will help you see your home the way a buyer will be looking at it.
2. Begin with CMAs -- Invite a few local Collingwood real estate agents to work up a CMA (Comparative Market Analysis) for your home. A CMA compares the price of homes recently SOLD, homes that were on the market but did not sell, and homes for sale in Collingwood currently on the market to give you and the agent an idea of how to price your home accordingly. Ask the agents you have selected why each particular home was included on their CMA. Have a list of questions and compare the answers you get from each agent. As you will find out, a CMA will show you varying prices for what each agent thinks your home is worth. Look for what seems to be a reasonable price. Some Collingwood real estate agents will want to price your home below market value, looking for a quick sell or what is called a bidding war. Some will overprice it looking to play on your hopes that your home is worth more than it really is, but an overpriced home will sit on the market longer and will likely need to be reduced later. Most REALTORS® will provide you with a home value estimate or Comparative Marketing Analysis (CMA), it as good idea to go with the right Real Estate Agent who has plenty of experience pricing homes in the Collingwood area.
3. Consider a Professional Appraisal -- A CMA will give you a good idea of the value of your home, especially if the agent is familiar with pricing homes in your neighbourhood. However, for several hundred dollars that it usually costs to purchase a professional appraisal, the money could be well spent for several reasons. If the CMAs you get from the real estate agents are not reasonably consistent, you might want to get an totally unbiased view point, one that you pay for. An appraisal of your home will make clear anything that may be wrong with your home and it adds an additional layer of assurance for prospective buyers. Appraisers rely on in-person inspections of your home, recent sales of like-homes in Collingwood, and other data to arrive at their opinion of your homes' true value. The report you receive from an appraiser is more detailed than a common CMA. The appraiser's report is a full-blown description of your home and the criteria used to formulate the valuation.
4. Research on your Own -- You can research several ways. Stop by homes for sale in Collingwood and pick up a flyer. Spend an hour or so on the Internet looking at homes with the same square footage, bedrooms, and bathrooms. Finally, visit open houses around your home and make an impartial assessment of how those homes compare to your own in terms of condition, location, size, ages, and upgrades. As you visit the open houses, make an honest assessment. Given similar condition, age and square footage, would you buy your home or the home you are touring?
5. Price per Square Foot -- Some agents may want to price your home solely on price per square footage. While this is an industry standard way of calculating home prices, there are many other tangible aspects that go into your home's price. The average price per square foot in your neighbourhood should be the starting point for setting your home's price.
6. The Collingwood Real Estate Market -- Consider the overall housing market in Collingwood. Are the home prices moving up over time? How long do homes stay on the market before they are sold or withdrawn? Where are the interest rates? Is the overall economy in Collingwood Ontario strong or weak? Are employers hiring or are they overly cautious of bring on new employees? Are builders actively building new homes? Will you be entering a buyer's market or a seller's market.
7. Determine your Selling Costs -- There are many costs involved in selling homes in Collingwood. Do not shy away from getting to the bottom line as this is essential information. Use a variety of mortgage calculators and financial calculators to understand various financial scenarios. You will want to be prepared for the flexibility you have in your budget. Know how much your real estate agent charges in commission; understand how much they take for themselves to market your home and how much is offered the buyer's agent. Estimate what your closing costs will be, along with the amount of money it will take to spruce up your home, pack, move, and purchase that new home.
8. Flexibility and Options -- Both you and the home buyer may have needs that go beyond the bottom-line. If you are willing to close escrow quickly, you will attract more buyers who want to move in right away. A lease-option can help first-time buyers who need down payment assistance. If you can offer seller-financing, your home will appeal to buyers who need to stretch their financial resources. The more creative and flexible you can be in meeting the buyer's needs, the more success you will have in pricing your home and selling your home. If your home has been on the Collingwood real estate market for a while, can you offer a point or two back to the buyer to help with closing costs or needed repairs?