One of the most difficult decisions a home owner has to make is setting the sale price of their property. It's difficult because most people make emotional decisions about their home – and everyone wants the best price for theirs.
Setting the correct price at the outset is critical, because most homes attract the largest number of potential buyers within the first month of being listed.
A property that has just been listed on the market will generally attract a high number of people at home openings and a high level of inquiry from prospective homebuyers.
If the price is too high, potential homebuyers will purchase a more competitively priced property in a nearby area. It is important for home sellers to remember that they are competing against every property that is listed for sale in surrounding areas.
The longer the property is listed for sale, the fewer the potential buyers who will be interested in inspecting it. It is no coincidence that one of the first questions buyers ask of a selling agent is how long the property has been listed for sale.
Generally, most correctly priced properties sell much quicker than the national average selling times quoted by institutes.
If the property has been listed for sale for more than three months, then homebuyers may begin to believe the property has some defect. As a result, they will be more likely to offer a much lower price.
Many homeowners make the mistake of believing their property is worth significantly more than similar properties in the suburb because of their emotional attachment to the home. Yet even though a home may be beautifully presented and heavily advertised, it may not sell if it is overpriced. However, if the home is well presented and well priced, it should sell quickly.
Homeowners also have to realise that local market conditions can change rapidly, which will have an impact on the selling price of a home. This is because not all suburbs rise in price at the same level: a suburb that achieved a 10 per cent increase the previous year may realise only a 5 per cent increase the next.
Shane Kempton is the chief executive of Professionals Real Estate. He is an experienced, well-respected real estate identity and chief executive committed to effective development of teams. His reputation is built on honesty, integrity, confidentiality and ethics, all highly valued traits of this influential leader.