Avoid pricing mistakes when marketing your property

Many property investors have become unwilling landlords over the last few years as the local property market stagnated, forcing them to hold on to homes they were unable to sell. With the property market now clearly in recovery mode, it is important to make sure that your property is correctly priced.

Here are ooba’s five common valuation errors for property investors to avoid:

1: Skipping the research
Don’t put your property on the market for what you think it is worth, what your friends think it might go for or even what prices are listed for in your area.
Instead, ensure you have an expert agent look at the recent sales of homes in your area that are similar to yours. This sort of comparative market analysis will give a much more realistic idea of what your home is worth.

2: Getting emotional It’s natural to become emotionally attached to a property, especially if you have renovated it and redecorated it to your taste. However, buyers are looking for a sound investment and are likely to view it dispassionately; they simply won’t pay extra for your sentimental attachment.

Hard as it is, it’s best to stay objective by looking at the statistics of actual comparable sales and remind yourself that you are involved in a business deal.

Remember, don’t take low offers personally. It could be the start of a negotiation that ends in a sale.

3: Going with the first agent
Consult more than one area expert to get a valuation from a few different agents in your area and ask them to back up their valuations with comparable sales data.

4: Pricing too high from the start
Agents will tell you that the first couple of weeks on the market are your most crucial time. If your property enters the market overpriced, many buyers will overlook it from the start because it will be out of their range and savvy buyers, who have been looking around for a while, have a good sense of the suitable pricing. By the time you reduce the price to fair market value, many potential buyers will have already found something else. Other buyers may initially be interested in your new low price, but they’ll also see that your property has been sitting on the market for some time. And that could lead them to believe there is something wrong with the property or think that you must be will be desperate and willing to accept a very low offer.

5: Chasing the market
If you price your property too high to begin with, you may find yourself making incremental price drops but never quite catching up with the market. And when a property has had multiple price reductions, buyers may view it as stale. It’s best to work with your agent, who is the expert in your area, to re-evaluate market conditions and determine the fair market value of your property