One of the most important and difficult decisions when it comes to selling one’s home is figuring out the current value of your home and what list price you should set. There are so many different variables in play, but we will do our best in this blog post to try and answer your question of how much should I list my house for?
There are two main questions that an agent will usually look at when helping a client figure out the best listing price for selling a house:
- What is my home’s market value?
- What price can I list my home for in order to bring in offers at or above my asking price?
Determining Your Home’s Market Value
When it comes to getting the maximum value out of your home and figuring out the best initial selling price, one of the most important factors is knowing your housing market. You have to realize that housing markets differ from province to province and city to city. Your Ottawa home could have a much different value than the same exact home in another city.
Even the same home in different Ottawa neighbourhoods could have a substantial difference in value. It’s highly likely that an agent would list the exact same home for sale in Kanata at a different price than we would list it for in Manotick. So one of the first things a good agent will look at when valuing a home is what the demand for houses is in your specific neighbourhood and area.
If you request a home valuation on our site, the agent doing the valuation will take a very close look at what houses are being sold in your area and for what prices they are selling for. They’ll break down the numbers for comparable houses to yours to see what listing prices homes had and what homes were actually selling for in the last month, last 3 months, last six months and last year. This will give them a better indication of what the housing trends are in your area. They'll see if prices are going up, down and by how much. It’s also important to note (especially in a cold-weather city like Ottawa) that seasonality can also play a major role in pricing trends. We’ll take a closer look at seasonal trends in an upcoming blog post.
Even homes within the same neighbourhoods can have different values depending on the time period they were built. A similar sized home in the same neighbourhood that was built in the 1950s will likely have a different value than if it was built in the 1990s.
After taking all of this (and more!) into consideration, your agent should have an estimated range in their head on what the value is in your home. The next step is going to be to figure out what price you should actually list your house for.
Determining Your Initial Listing Price
Now that we have a good idea of what your home should be worth, you still need to figure out what price you’re going to list it for. Oftentimes you'll want to put yourself in the shoes of someone looking to buy a home in your neighbourhood. They’ll be scanning Ottawa real estate MLS listings when trying to figure out which homes they are interested in and want to visit in person.
So if your house appears overpriced compared to other houses on the market, you shoot yourself in the foot right away. When browsing Ottawa MLS listings, a potential buyer will most likely clue in right away that other houses look like better deals than yours and they will move on. It’s rarely the case that a buyer will think to themselves “Well, this home might be priced a bit high but I bet I can negotiate a better deal”. Instead, they’ll look at a house priced lower and think “Wow, do these people not realize they could be listing this house for much higher? What a deal this is!”
In addition to this, another issue you face when overpricing your home is that it may take longer to sell and eventually it will go stale on the market. Buyers are usually very suspicious when it comes to homes that have been on the market for an extended period of time and will be asking themselves questions as to why no one is making offers on your home.
So you will want to make sure that when figuring out what price to list your house for, that your initial price is realistic compared to your local market.
Small pricing fluctuations can also make a big difference. When a buyer is searching for a home, they usually have ranges that are within increments of $25,000. Our search also allows people to search within price range cutoffs. So pricing a home at $455,000 might not make the most sense. A price of $449,900 would most likely introduce a substantial amount of additional buyer interest.
We realize this all may seem quite overwhelming, but that’s what we’re here for. Our preferred agents know the Ottawa Real Estate market and can help you figure out the best price to list your home for.
If you want a professional to give you a free home value estimate on your house, then click here to fill out a free home value estimate request and one of our preferred agents will be in touch with you right away.