How to determine the selling price of real estate?
If you’ve chosen one or several real estate agencies according to the criteria we talked about in the last episode, if you haven’t left the sale or rental of your property to a know-it-all who dabbles in everything, including real estate, and if you paid no attention to the advice of “well-meaning” friends who seem all too eager to mediate the sale of your apartment, you are on the right track.
Price
Let’s talk about price now. Don't expect to call a real estate agent,
tell him the area of your apartment, its location, and immediately get a price for which the agency could rent/sell it. A professional will never tell you straight away.
All you have to do is google the average price per square meter in your locality and multiply it by the dwelling surface. And you’re on your way to real estate hell. Why? An experienced real estate agent will never give you a ballpark price, because he knows that it can be affected by a lot of factors. Those include, for example, views,
height of the ceilings, potential of the surrounding area... There are at least 40 such factors, and only then comes the comparison with the rest of the market.
Free estimate:
Have you already seen the motto: "Free estimate"? Don’t let anyone fool you. We all know that only the cheese in a mousetrap is free.
You fill in information about your property including personal contacts, location, area and so on, on a fancy, colourful website full of pictures. And what will that get you? Your data will go directly to the broker that cooperates with this professional estimation portal.
Or the company that owns the estimation portal resells your data.
What then…? You’ll get a call from some kind of broker.
What’s better, to choose a real estate agency yourself, or to broadcast your personal data without knowing where it might end up?
Exclusivity - yes or no?
Another issue that affects the selling price is: Should you entrust your property to a real estate agency exclusively or not?
Some people are against exclusivity, arguing that they already tried it with someone else and it didn't work out. One reason could be
that before entrusting your house or apartment to that real estate agency, you failed to do the research we talked about in episode 2.
In that case, stop this video and check out the episode "How to choose a real estate agency".
There are also resourceful owners who, instead of entrusting their property to one real estate agency, want to "create competition" between multiple intermediaries!
Some readers may be asking themselves: What does exclusivity have to do with the price of real estate? The answer is: more than you'd expect! Let me list the three main factors:
A property offered by several real estate agencies doesn’t look as exclusive.
Non-exclusivity drags down the price of your property on the market.
As a consequence of the competition you so wanted, every real estate agency will try to sell the property as quickly as possible, no matter for how much. Those interested will call several realtors to force you to lower the price. And you won’t even know it’s all the same bidder, bidding against himself.
If a real estate agency has your property in its offer exclusively, and several parties show interest in it at the same time, it will try to sell it at the highest possible price, because it won’t be under pressure from the competition. What is more beneficial for you? When real estate agencies compete for business, or potential buyers for your real estate?
If your property is offered by several real estate agencies for the same price, you have to keep an eye on them. Why? It’s only a matter of time for the weakest one to start lowering the price of your property in order to attract clients.
So, what will it be: the opinion of an expert, or will you put a price tag on your property yourself by multiplying the area by price per square meter? A competition of real estate agencies, or selling for a higher price? Your ideas about the real estate market versus our facts.
