Real Estate Talk: Effective property pricing - Westmount Magazine (2024)

How to price your property to maximize gain

By Joseph Marovitch

If an average property has not sold within six months, it is not effectively priced to achieve a quick sale with maximum profit.

There are many factors that account for the time it takes a property to sell and these factors should be considered when pricing a property. Factors include the size of the property, the location, condition, comparable property for sale and sold in past 12 months, the state of the economy, the political climate, etc.

All these factors can be considered to price a property for the current market. Granted, as time passes, some factors can suddenly change. However, as change occurs, the seller must navigate to resolve issues that arrive from the change. If the change is long term, such as the pandemic, then adjust the price of the property accordingly or take the property off the market until circ*mstances improve.

If an average property has not sold within six months, it is not effectively priced to achieve a quick sale with maximum profit.

Generally, under normal circ*mstances, there is a price that allows maximum gain with minimum wait time. When evaluating a residential property for the purpose of pricing, the following factors are considered:

• Location
  .
• Condition
  .
• Size, number of bedrooms, bathrooms, garages, additional accessories (ex: pool)
  .
• Comparable property that sold in the past 12 months – a particularly good indication as to what the subject property will sell for
  .
• Comparable property that is for sale – sellers must consider the competition

The comparable sold and active listings provide the seller with a price range that their property will sell in. What determines the pinpoint price of the subject property, in the range, is the condition of the residence. If the property is in poor to medium condition, the price would be on the lower half of the scale. If the property is in excellent condition, it would be placed at the top of the range, one would think.

If the property is in excellent condition and the price is at the top of the range, only those that can easily afford the property will show interest and eventually visit, and hopefully make an offer.

‘Buyers want value like a prospector searching for gold, and once they find it, they usually do not want to let go.’

However, if the property, which is in excellent condition, is priced lower on the scale, all those buyers who are searching in the price range the property is in will see added value.

Buyers believing there is added value to be had, the seller will find they now have many interested buyers. The result can be multiple offers and a sale price that may exceed the asking price. This is because once a buyer is hooked they tend to fall in love with the property and do not want to let go. The price being lower than the scale also means the buyers see value and approach much quicker.

A property does not have to be in excellent condition for a lower sale price to generate more offers at a quicker pace. In any condition, a property can be placed on a price scale, and slightly a notch or two lower, to provide added value/incentive. Buyers want value like a prospector searching for gold, and once they find it, they usually do not want to let go.

As a note, to know if a property is properly priced, examine the following from Centris every month during the marketing campaign:

• Many views of the listing + many inquiries + many visits + many offers = Price is slightly low but will end up high
  .
• Many views of the listing + many inquiries + few visit + few or low offers = Price is high
  .
• Many views of the listing + few inquiries + no visits + no offers = Price is way too high
  .
• Few or no views of the listing + no inquiries + no visit + no offers = Marketing problem

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: Knowing the trend in real estate, where price will rise or fall in the future

State of the market

The Canadian real estate market is affected by local political and economic conditions. It is also affected by international political and economic conditions, specifically the U.S. political and economic conditions. Canada, like the rest of the world, is affected by the pandemic, however, for the most part, Canadians are managing to adjust to the situation. Most are wearing masks, social distancing and reducing the infection and rate of death curve.

In the U.S., the federal government is not reducing transmission and the death rate. The Trump administration is increasing the issue by not leading by example and wearing masks, by not social distancing and actually, both resisting precautions and encouraging group gatherings.

‘Condominium demand in the Montreal downtown core and other urban dense areas is decreasing while demand for property in the Laurentians and Townships is increasing.’

As this behaviour continues, the pandemic will worsen and spread over the U.S./Canada border. The behaviour of not using masks and social distancing both in the U.S. and Canada can prolong the pandemic and slow the economy. Another result of the pandemic is the shift in demand for real estate.

Condominium demand in the Montreal downtown core and other urban dense areas is decreasing while demand for property in the Laurentians and Townships is increasing. The result is urban prices are falling while suburban and countryside prices are rising.

Stay safe and have a great weekend!

Let’s not forget that people with cancer are vulnerable too!

You are invited to keep giving to the following organizations since it’s now more important than ever to support cancer research! Click on the logos below to find out how:

Image: Public domain

Other articles by Joseph Marovitch