Setting the right asking price: The importance of knowing your property's market value

For sellers, setting an asking price for a home that they have lived in for a long time can be one of the more challenging things to do when putting their property on the market.

This emotional attachment coupled with the myth that you should list your home at a slightly higher asking price often leads to properties staying on the market much longer than they should at their inflated prices.

This is especially true if other homes in the same area offer similar features, but at market-related prices. The fact is that an asking price that is market-related will appeal to a far larger range of buyers, than one that isn’t.

In fact, more often than not, inflated prices can have the opposite effect by scaring off potential buyers at first because of the high price, and later on when you have dropped your price, potential buyers start to question why is hasn’t sold yet. 

There is often a negative association with a property that has been on the market for longer than the average time, which can lead to it eventually selling for below its actual value. 

The only way that sellers can know whether their home is priced correctly is by knowing how a property’s value is determined. Of course, market conditions will play a vital role in determining a home’s current value, along with what buyers are willing to pay for it. This will vary from one area to another taking into consideration a number of factors such as location, the strength of the local market, type of properties in the area, and demand for them, as well as access to amenities and the like. It is impossible to separate property prices from demand - the more sought-after the area, the higher the value of the property. 

One of the best ways to determine what buyers have paid for properties within an area is by speaking to a reputable real estate agent who specialises in that area. They will have a record of how many properties with similar offerings to the seller’s home have recently sold in the last three to six months and for how much. 

An experienced real estate agent will have the necessary expertise to guide them with regard to setting the right asking price by collecting information and statistics from various sources and compiled together to determine the average price per square metre of property in the area. 

By determining the square metre pricing, the agent is able to compare apples with apples. Once this base has been reached, it is far easier to give an accurate appraisal of the property, taking into consideration any other factors that might affect the property's exact value. These factors would include the condition of the property and its size, security features, finishes and fixtures, and any other features that could set the house apart from others in the area.

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