The Toronto Real Estate market can be an exciting place to be, and with myriad buyers from all around the world, if your house is priced and marketed correctly, you stand a good chance of meeting your objective of selling your house in a reasonable amount of time.
One common issue for Toronto Realtors is that home sellers often wish to overprice their homes. Part of a Realtor’s job as they are helping you create a strategy to effectively market your home is to help you establish a listing price.
While many homeowners greatly value their home and have a special affection towards it (this is understandable, of course, with memories and family history being wrapped up in the property), it’s important to understand that once you put your home on the market it becomes a commodity. It is a product, and you are competing for the attention and ultimately the investment of buyers. Many other properties may be in your competitive niche, and you may not even know what you are competing against. Your Realtor should give you a good idea of what is on the market in the suggested price range; what has sold and not sold, and what is selling quickly.
Effective real estate marketing strategy should include a variety of advertising and promotion tactics specifically suited to your property, however all the exposure in the world will not help if your home is overpriced. According to the Ontario Real Estate Association, here are several reasons overpricing your house may have negative repercussions, some of which you may not have thought of and which could have long-lasting impact:
- The risk of appearing in the wrong price category and thereby restricting the number of qualified buyers who might otherwise seriously consider the property (eg. buyers in the $400,000-$500,000 category not looking above $500,000 price level).
- Difficulty inspiring enthusiasm and interest from other salespeople and brokers, who may not show the property if it is overpriced.
- The home may remain unsold and become ‘market stale.’ Even if the price is then lowered, little interest may be generated, and buyers may (unjustly) assume that something is wrong with the house. The seller may even have to reduce the listing price below market value just to regain market momentum.
- The house risks being a ‘comparison house’ – there may be lots of showings, but the house is shown to buyers as a means to sell other, well-priced homes.
A home languishing on the market is not good for the homeowner or the brokerage. Your Realtor, and by extension the Brokerage you employ, should work with you as a team to get your property sold. Their enthusiasm is important, and working together with an agreed strategy – from home preparation to pricing to negotiations – offers your best bet for an effective process and positive outcome.
In conclusion, as OREA states, “Overpricing can have far reaching negative impact, is difficult to overcome and can prove costly for everyone involved.”