The real estate sector in Pakistan is on a forever-evolving trajectory, and so are the different approaches to property pricing. While most agents and sellers stick to using the same tactic, others continue to try and learn new things with time, the ultimate goal being a profitable payday at the end. If you are a beginner in the real estate arena, then you should definitely be conscious of some of the common real estate pricing mistakes that can seriously hinder your debut in the property market.
You might hear it a lot, but let us remind you once again: if it is your first time selling a property, your pricing strategies can either make or break the deal in no time. Customers are attracted to prices, and most investors and property seekers hit the market with one plan in their mind – buy low, sell high.
A property priced insanely and unnecessarily high will most probably stay on the market for extended periods, while a lower-than-average priced property puts customers in a state of suspicion. What is the right approach to pricing? Quite fortunately, there are some particular approaches to pricing a property right and here are some things you should know of, whilst deciding a price tag for your property:
- Investigating past sales in the local market
- Getting too involved or too detached
- Leaving no space for negotiation
- Ignoring the neighborhood and location
Investigating Past Sales in the Local Market
The most significant factor in evaluating a house value is to research the local property market comprehensively. Now the question arises, what kind of research work do you need before hitting the property market?
To start with, you should visit the real estate market in your neighborhood and search for the properties that have been sold out in the last 3 to 6 months. While you are looking at the past sales data, you need to be precise about a few things, including the properties remarkably similar to yours, in terms of condition, location, and size. It would be best to be conscious of the fact that the situation of the market should also be somehow similar when pricing your house.
Getting Too Involved Or Too Detached
However, buying and selling in the real estate sector is a very demanding process. For certain reasons, it requires your time, while there will be moments when the same will demand your emotions. Furthermore, knowingly or unknowingly, you might get emotionally invested in the process, and it will end up draining you out. Being emotionally linked to your task is a great thing, but do not let those emotions get the best of you. Most first-time sellers fall prey to this real estate pricing mistake, where they weigh emotions rather than tangible factors of the property. Let us be clear about one fact, buyers are less-intrigued by the way you view the property, and they instead discover solace in how they want their dream house to be.
So, if your property is unique to you, it should not give you any reason to price it how you feel about it. Use a rather pragmatic approach and try to see it from a buyer’s view. Also, be well prepared for low-ball offers since there are different types of negotiators in the market.
Leaving No Space for Negotiation
First impressions last forever, also in the property market – which means that initial offers are the most prominent ones in generating public relations. Let us say if a seller enters the market with a “no-bargain-policy” and produces no wiggle room for negotiations. It is quite natural that most buyers will overlook the offer right from the start. And, by the time you lessen the price to average market value, you will have already lost numerous potential buyers to other reasonable options in the market.
Ignoring the Neighborhood and Location
Have you ever wondered why location is ever a priority for real estate investors? Well, neighborhood and area play a significant role in deciding the price of your possession. Sellers often overlook the surroundings of a house while pricing their homes. For example, a property situated on the main road is not perceived the same as the one that is located near a railway track – no matter if the developers and other such circumstances remain the same. A property with a view of the lake might sell higher than the one facing the parking area. These circumstances are incredibly crucial in deciding the value of your property.
So, if you do not price your house correctly, taking considerations of neighborhood and location, the odds are high that your first transaction will not be a pleasant experience.
Buyers will not make considerations of your strategies or finances. It is in your high interest to think like the buyer to bring them. You also need to understand the features a buyer will examine before purchasing your property. Your aim should be to make a profit while buyers or investors want a feature they can proudly add to their portfolio.