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Happy Tuesday, 

Have you been keeping an eye on the real estate market in Halifax? It's a seller's market out there, prompting many people to take advantage of the market while it's hot and list their homes. 

When it comes to selling your home, the biggest question I get is around pricing. So let's discuss the pros and cons of three pricing strategies for a seller's market:

Option 1: Price above market value

Say we push the envelope on price and list your home above market value, what will happen? 

The pros are that you may find that perfect buyer and set a new value for your home and the neighbourhood. And a seller's market is the best time to test the market and set a record price for your area. Sounds great, doesn't it? 

But there are definitely some risks to this strategy.

More often than not, this strategy will have you headed towards spending too much time on the market. 

To sell your home, you need to attract the attention of buyers and the agents who represent those buyers. Frequently when a home is overpriced, agents won't even mention it to their clients. They will know that it's overpriced and not waste their client's time showing it. 

In today's market, 94% of buyers begin their home search online and set price filter preferences. 

Pricing your home above market value makes it more difficult for buyers to find your home, with online filtering making it so that there's a chance that realistic buyers will miss your home completely.

Let's say you do find a buyer willing to pay above market value for your home, the next hurdle will be the appraisal. For the buyer to obtain a mortgage, the lender will often require an appraisal, and appraisers will look at the comparable homes in the neighbourhood to determine value. If the appraiser does not feel the home is worth what the buyer has offered, their lender may decline to finance their purchase.

Option 2: Price at fair market value

As there are pros and cons for pricing your home above market value, there are pros and cons for pricing it at fair market value. 

It can be appealing to price over the market value, so you're able to get the most money for your home. But that's not always the best idea. 

Pricing at fair market value gives you an advantage in the following areas: 

Exposure Online. With buyers today starting their home searches online, the first criteria they typically enter is the price. Every buyer is looking to get the most for their money within a set range of prices. By pricing at market value, you increase your chances of showing up in front of a buyer who can afford your home.

Appealing to other agents. When agents who represent buyers see your home listed at fair market value, they will be more motivated to bring their clients to take a look at it if it meets their criteria.  

Easy Appraisal. Pricing your home at fair market value makes the appraisal process smoother and doesn't hold your buyer up in getting their mortgage. Being realistic with the value of your home can lead to a more seamless transaction all around.

The downside of pricing your home at fair market value is that you could potentially be leaving money on the table, but that's what negotiating the transaction is all about.

Option 2: Price below market value

Pricing your home below fair market value does not necessarily mean that it will sell below fair market value. 

When you price your home lower, it can often create a frenzy among buyers and drive up the price. Have you ever watched an auction? It's like that, where everyone wants to acquire the home for a bargain, but the demand and attention it gets from other buyers increases the resulting sale price and maybe setting a record price for your neighbourhood. 

Is pricing your home below market value right for you? Here are a few pros and cons to understand first:

More opportunities: Below market pricing often creates a frenzy and attracts more buyers and multiple offers. 

Moves quickly: A below market value home will not be sitting on the market for very long as you'll catch the attention of more people searching online and more agents who see the value in your home. 

Closes above listing price: Which is the primary goal of this strategy. 

The cons of selling below market value are what you'd fear. If there is not enough demand, it could result in a sale lower than the market value.

What kind of seller are you?

When it comes to pricing your home, it all comes down to what kind of seller you are. Are you:
Patient – ok to list high, no rush to sell but willing to reduce if necessary. 
Low risk – willing to list at just above market value so that there is a little room to negotiate.
Risk-taker – willing to list below market value to solicit multiple offers and potentially higher outcome.

Whatever type of seller you are, there has never been a better time to list your home. Still having questions around selling your home or know someone considering a move? Hit that reply button with any questions you have or find me on Facebook or Instagram.

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New listing in Timberlea 

This lovely property just listed on Thursday, featuring a unique layout, soaring ceilings and plenty of light and airy living space. Check out the full listing here. 
Combining market data with insights from Engel & Völkers’ local market experts from Halifax, Montréal, Ottawa, Toronto, and Vancouver, the report takes a deep-dive into what’s happening inside Canada’s top real estate markets including notable trends, in-demand neighbourhoods, economic factors, and changing buyer and seller preferences.

Read the full report here
Copyright © 2020 Margaret Craig, REALTOR® / Real Estate Advisor, All rights reserved.

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