Are you wondering how to price your home to sell? I’m going to give you the 3 step process to price your home so that it sells quickly, and for the most money possible.

Step 1 Analyse Past Sales

First we want to determine what the market value is. Market value is what buyers are willing and able to pay for a home. We do this by analysing homes that have sold recently in the same neighbourhood that are similar to your home. Since the real estate market is dynamic and constantly changing, we may have to make adjustments to the price. For example if the comparable property sold 6 months ago for $650,000 and the local market has appreciated by 5% over the last 6 months, then the price of the comparable should be adjusted to $682,500

Step 2 Assess the Competition

Take a look to see if there are any homes currently on the market in your area, that are comparable to your home. Buyers will be comparing your home to these properties so it is important to position your property strategically, to give your home the advantage. Take a look at how long the properties have been on the market. If it has been over 3 months, then there is a good chance that the property is over priced. That gives you a signal that you should price your property under the one that isn’t selling, since if you come in at the same price, your property will likely sit there as well.

Step 3 Analyse the Local Market

What are the current market conditions in your area? Is it a buyer’s market, where there are many listings but only a few buyers looking to purchase them? Is it a seller’s market where there are only a few listings but many buyers looking to purchase a home? Or is it a balanced market where there are roughly an even amount of buyers and sellers?

When you are in a buyers market or a balanced market, the best strategy is usually to price the home at market value. This way you signal to potential buyers that your are serious about selling. If you’re lucky enough to find yourself in a hot seller’s market, another strategy to consider is to significantly under price your home. The intent is to expose your property to the most amount of buyers, and to create so much demand that a bidding war develops and drives up the sale price of the property. Consult with your agent to see which strategy would be best for your particular situation.

The number one reason why a home does not sell is because it is over price. That is why i don’t recommend over pricing as a strategy. The home will end up sitting on the market, and eventually the price will need to be lowered anyway. The problem is that once the listing is on the market for a long time, it becomes “stale” and does not garner the same amount of attention that it would have if it was priced competitively in the first place.