“We can always lower the price later.”
It sounds reasonable when you’re getting ready to sell. But before choosing an ambitious asking price, ask yourself: how does your home compare with the other properties buyers can purchase for that amount?
A useful pricing plan starts with evidence, an honest look at your home and a clear understanding of your next move.
Start with what actually sold
The house down the street might be listed at an impressive price. That doesn’t mean a buyer will pay it.
Ask your REALTOR® for a comparative market analysis that looks at recent sales of similar properties. Location, size, age, condition and features all matter. A nearby home with a renovated interior and garage may tell a different story than one that needs substantial work. Canadian real estate regulators identify comparable sales as a foundation for realistic pricing.
Ask your REALTOR® to explain how each comparable property differs from yours and how those differences affect the suggested price.
Review homes currently for sale as well. These are the properties buyers may be comparing with yours. Their asking prices show the competition, but not what buyers are willing to pay.
Give your upgrades a realistic value
A renovation receipt tells you what the work cost. It doesn’t tell you how much a buyer will add to an offer.
A renovated kitchen, new flooring or updated bathroom may help your home appeal to buyers, but you shouldn’t assume you’ll recover every dollar. The Appraisal Institute of Canada notes that renovation value depends on the local market and buyer expectations.
Before spending money on updates, talk with your REALTOR® about what buyers expect in your price range. A thorough cleaning, minor repairs and finishing incomplete projects may be a better use of your budget than a major renovation.
Be equally honest about work your home still needs. Price it against properties in comparable condition, rather than borrowing the price of a fully updated home.
Work out what you’ll keep
Your mortgage balance and the down payment you need for your next purchase matter to your plans. They don’t establish what a buyer will pay for your current home.
Ask for an estimate of your proceeds at a few possible sale prices. Account for the mortgage payout, real estate fees, legal fees and any applicable mortgage discharge charges or prepayment penalties. Confirm mortgage costs with your lender.
That calculation can help you decide if selling now works financially. If the numbers are tight, it’s better to know before you commit to another purchase.
Be careful with “room to negotiate”
There’s a difference between allowing for negotiation and choosing a price the comparable sales don’t support.
Look at other homes for sale in your proposed price range and consider how yours compares. If buyers can get more space, an updated interior or a garage for a similar amount, you may need to reconsider your asking price.
A lower asking price won’t necessarily lead to a higher sale price. Even in a busy market, there’s no guarantee of multiple offers or that buyers will offer the amount you’re hoping for.
Ask your REALTOR® to explain the reasoning and risks behind the proposed strategy.
Agree on when to review the price
Before listing, set a time to review the response with your REALTOR®. Ask what level of activity is reasonable for comparable homes in your area and price range.
Review the number of showings and buyer feedback alongside recent sales and competing listings. If interest is low, look at the full picture before changing the price. Listing photos, your home’s condition and how easily buyers can arrange a viewing may also affect the response.
If the evidence supports a price change, ask how the new amount improves your position against competing homes. Make the adjustment for a clear reason, rather than choosing a small reduction simply to show that something has changed.
You don’t need to predict the final sale price perfectly. You need an asking price you can explain, a financial plan you understand and a willingness to respond to what the market tells you.
This article provides general information, not a property valuation or financial advice. Market conditions and individual circumstances vary. Consult a local REALTOR® for pricing advice specific to your home.
