The real estate industry in Pakistan is on a forever-evolving trajectory, and so are the different approaches to property pricing. While most sellers and agents stick to using the same tactic, others continue to learn and try new things with time, the ultimate goal being a profitable payday at the end. If you’re a beginner in the real estate arena, then you should definitely be aware of some of the most common real estate pricing mistakes that can severely hinder your debut in the property market.
We had previously discussed some pitfalls of overpricing your home, and now, here’s our take on the most common real estate pricing mistakes that every seller should avoid!
5 Common Real Estate Pricing Mistakes That First-Time Sellers Need to Curve
You might hear it a lot, but let’s remind you once again: if it’s your first time selling a property – your pricing strategy can either make or break the deal in no time. Buyers are attracted to prices, and most investors and property seekers hit the market with one thought in their mind – buy low, sell high.
A property priced ridiculously and unnecessarily high will most probably stay on the market for extended periods, while a lower-than-average priced property puts buyers in a state of suspicion. So, what is the right approach to pricing? Is there something in-between?
Quite fortunately, there are some specific approaches to pricing a property right and here are some things you should be aware of while deciding a price tag for your property:
- Investigating Past Sales in the Local Market
- Getting too Involved or too Detached
- Relying on Incomplete Data
- Leaving no Space for Negotiation
- Ignoring the Neighbourhood and Location
Investigating Past Sales in the Local Market
The most crucial factor in evaluating a home’s value is to research the local property market comprehensively. Now the question is, what kind of research work do you need before hitting the property market?
To begin with, you should visit the real estate market in your neighbourhood (real estate agents in your neighbourhood) and look for the properties that have been sold in the last 3-6 months. While you’re looking at the past sales data, you need to be specific about a few things, including the properties extremely similar to yours, in terms of location, condition, and size. It would be best to be careful about the fact that the situation of the market should also be somewhat similar when pricing your home.
Getting too Involved or too Detached
Needless to say, buying and selling in the real estate industry is an extremely demanding process. It, for certain reasons, demands your time, while there will be times when the same will demand your emotions. Also, knowingly or unknowingly, you might get emotionally invested in the process, and it will end up draining you emotionally. Being emotionally attached to your task is a good thing, but don’t let those emotions get the best of you. Most first-time sellers fall prey to this particular real estate pricing mistake where they weigh emotions instead of tangible factors of the property. Let’s be clear about one fact, buyers are less-intrigued by the way you see the property, and they rather find solace in how they want their dream home to be.
So, if your property is special to you, it shouldn’t give you any reason to price it how you feel about it. Use a rather practical approach and try to see it from a buyer’s perspective. Also, be prepared for low-ball offers since there are different types of negotiators in the market.
Relying on Incomplete Data
Relying on incomplete data is yet another real estate pricing mistake that sellers need to avoid. You can avoid such situations by using Zameen.com as your priority search engine for property listing. Whether it is a 2-bedroom apartment in Karachi or a double-storey house in Lahore, we aim at providing you with the best and most accurate data. We use relative market data, and our experts make sure that your property gets rightly priced from the beginning, giving it the best chance to sell.
Leaving no Space for Negotiation
First impressions last forever, even in the property market – which means that initial offers are the most important ones in generating public relations. Let’s say if a seller enters the market with a “no-bargain-policy” and sets no wiggle room for negotiations. In such cases, it is only natural that most buyers will overlook the offer right from the beginning. And, by the time you reduce the price to average market value, you will have already lost several potential buyers to other reasonable options in the market.
On the other hand, another drawback of using this approach towards pricing your home is that your house might attract a buyer on fair market value, but it will also make them think twice since the house has been on the market for too long already.
Ignoring the Neighbourhood and Location
Have you ever wondered why location is always a priority for real estate investors? Well, location and neighbourhood play a great role in deciding the price of your possession. Sellers often ignore the surroundings of a house while pricing their homes. For instance, a property situated on a main road isn’t perceived the same as the one that is situated near a railway track – no matter if the developers and other such factors remain the same. Not to mention, a property with a lake view might sell higher than the one facing the parking lot. These factors are extremely crucial in deciding the value of your property.
So, if you do not price your home appropriately, taking considerations of location and neighbourhood, the chances are high that your first transaction will not be a pleasant experience.
Simply put, buyers won’t take considerations of your finances or strategies. It is in your best interest to think like the buyer in order to attract them. You also need to understand the aspects a buyer will examine before purchasing your property. Your aim [as a seller] is to make a profit while buyers or investors want a property they can proudly add to their portfolio.
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