By the Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella
When someone decides to sell their home one of the first questions they must consider is “what price am I willing to accept for my home?”.
In Queensland, we’re currently experiencing high buyer demand for properties and the sales market continues to exceed and defy expectations of both vendors and agents, making it very difficult to predict the price that the market values the property at.
However, before you put your home on the market, you’ll want to have an informed estimate of what you can reasonably expect to sell your property for, so you can identify outstanding offers.
No matter what your chosen method of sale is, in this heated sales market, you may receive competitive offers early on in your sales campaign as buyers attempt to take the property off the market as soon as possible. One tactic buyers may use is to put an expiry date on their offer, so you’ll want to have your ideal price parameters in mind so you can respond in a timely fashion.
It’s important to understand that there is no exact science to setting your price expectations, and no crystal ball to predict how the market will respond to your sales campaign. However, the following steps will help get you started.
STAY ON TOP OF THE LATEST SALE PRICES
The first step is to do your homework and begin your own research online. All of the major listing portals have ‘sold’ sections that will reveal the price that similar homes in your area, or even your street, recently sold for.
In this rapidly moving market, you will need to stay hot on the trail of sale prices and where possible, avoid 12-week-old sales data in order to ensure you’re not basing your figure on stale numbers. Due to some delays in revealing sales prices online, you may need to contact the selling agent of recently sold comparable properties to enquire about the sale price, before it is made public online.
SEEK EXPERT ADVICE AND APPRAISALS
After doing your own online research, the next step is to begin interviewing agents who will help you refine your price and let you know how realistic your expectations are. Choose an agent who is very experienced in your area. This skilled person is an expert and will know the market intimately and will be able to fine-tune your education, helping you settle on an achievable price for your home.
A good start is an appraisal – an estimate of the sale price provided by a real estate professional. You can also ask the agent for a comparative market analysis (CMA) or a written statement for your property showing how they decided the market value of the property. This report contains information on at least three properties of a similar standard and style to yours, that have sold recently in your area (usually within around 5km).
MARKET WITH OR WITHOUT A PRICE
Given the hot competition for property, it’s not surprising that more people are opting for auction or expressions of interest methods of sale, where it’s completely up to the market to decide the price.
Property sales can be marketed with a fixed or price range or ‘offers over’. In some cases, properties may be marketed without a price or ‘expressions of interest’, ‘by negotiation’, and ‘best offers by’.
In Queensland, if the property is being sold by auction, it is unlawful to provide a price or price guide to potential buyers. However, you still need to decide what you set for a confidential reserve price for the auction. This is the minimum sale price for the property and must be put it into writing. Once bidding reaches or exceeds the reserve price, the property becomes ‘on the market’ and you must accept the highest bid as the sale price. You can decide not to set a reserve price, but this is a very risky strategy and not recommended because you are obligated to accept the highest bid – meaning the property is ‘on the market’ from the first bid.
Bear in mind, that while it’s clearly a seller’s market at the moment, it’s important not to get too swept up in dreaming of a jaw-dropping offer. Having unrealistic price expectations may damage your prospects of a quick sale and may mean you pass on offers that you later regret.
Also be aware that most home owners look at their home through rose-coloured glasses and when they compare their home with nearby homes that sold well, affection for their own family home can blind them to differences, flaws and any issues that might affect price. Trust your agent and the advice that they give you.
At the end of the day, there is a range of factors that go into what the price could potentially be, but ultimately, it’s the market that will decide.