We all know it’s currently a seller’s market. But the real estate industry was buzzing this week about the sale of a 5 bedroom home near Yonge & Lawrence for $1,366,000 that was listed for only $699,000. There were 72 offers! Many sellers are hoping for bidding wars in the current market, and underpricing your property is a strategy to get that, but is it a good idea for agents to be underpricing properties so drastically?!
One of the main reasons you should be hiring a realtor is for their skill at pricing. This comes from experience and knowledge of the market. In my opinion, underpricing a property to this extent is a bit of an easy route and hoping for the best. There are issues that can arise from underpricing just as issues can arise from overpricing. A good realtor will get the best possible price for their client, and set a standard for buyers. By underpricing, sellers may end up thinking they got a good price, when they actually gave away thousands without realizing it.
One of the things I pride myself on is maintaining the values in my neighbourhoods. And the neighbours notice!
I feel this is an important job of mine. Doing a comparative market analysis is a lot more work than most people think. As I mentioned before, it’s my job to explain to buyers the value of a property, and not just allow a bidding war determine that.
Yes, buyers will determine what market value is, but it’s also the realtor’s job to know and help advise on values in different areas. Without the advice of a good, full-time realtor, it would be difficult for buyers to know what to offer and for sellers to know what to accept. Selling and buying real estate can be stressful, so having professional advice will give you the confidence that you did the right thing when you look back at the transaction down the road.