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Should I reduce the price of my house if it is slow to sell?

Sellers who price too high often find themselves plunged into the following vicious cycle: the amount is contrary to the expectations of buyers who bid on neighboring houses and the overpriced house hangs out in the market. Weeks and months go by and new buyers suspect that this overpriced house has a problem. It therefore remains unsold.  

To avoid "burning" a house in this way, the best is to display the right price as soon as it is put on the market.   

But if the house doesn't sell, you have three options.     

  1. You can wait and hope for a buyer to make an offer. But you could wait a long time.   
  2. 2You can take your house off the market.  
  3. You can lower the price. And contrary to popular belief, it is this third option that is likely to be the most profitable, since it is expensive in time and money to keep an unsold home. 

How to establish a fair price?

There are two numbers to determine: the price you will ask and the price you want. The gap between these two will allow you to negotiate.   

This will obviously depend on the market in which your home is located, but as a general rule, you should expect to negotiate the amount, or even the conditions of sale. Try to please your potential buyers and give them the opportunity to negotiate. It's human nature: we like to negotiate.   

To determine market value, you can use the comparables method, which takes into account the selling price of comparable buildings in your area.

Be careful, however, not to confuse market value and municipal value. The municipal value is established by your municipality for tax purposes. It may be greater or less than market value, depending on the city and area.    

For the rest, it will all depend on your eagerness to sell your house. If you are in a hurry to sell, simply list your home at a price that is a little below market value.   

Advices

  • To properly adjust your price, you must rely on the prices of houses sold and not those of houses for sale, and even less on the municipal value.   
  • Priced too high, a home that doesn't sell will end up costing a lot.   
  • To get the price right, prefer the advice of a professional, such as an appraiser or certified appraiser, to that of your brother-in-law.    
  • Use the services of a real estate broker who will check the market before putting up for sale using recent comparables sold

Fom: Dois-je vendre ma maison au rabais si elle ne se vend pas ? par Ghislain Larochelle, Le Journal de Montréal,le 20 janvier 2020

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