If you want to get the best value for the money that you will pay for the home that you are planning to buy, you have to understand how sellers set the price. This Ottawa homebuyer guide will give you an idea about the different pricing strategies that homesellers use in setting their asking price. By knowing these strategies, you will have a better understanding and idea as to how much is the most reasonable price to offer for the home.
Ottawa Homebuyer Guide – Pricing Strategies Used By Sellers
Overpricing. Most sellers would want to get the most amount of money for their home. Having more than one interested buyer for the home gives the seller the advantage of being able to overprice the home. If the competition for the listing or the home is high, the seller has the tendency to raise the price of the home. Most of the time, they raise the price to up to 20% more of the actual market value.
Open For Negotiation. Some sellers would set an asking price that is a bit higher than its actual market value. Their reason is that when it comes to negotiation, they will still be getting the market value of their home. This is the strategy to make the home buyer think that he is getting a good deal or discount in his purchase. However, the truth is that they are still paying the actual market value of the home.
Actual Market Value. There are sellers who price their home for sale based on its actual market value. This means that you, as a buyer, will be paying for the most realistic price for the home. Why would a home seller set the actual market value as the price? Mostly, the reason is to sell the home right away. The real estate market is very competitive and if you want to sell your home, then you need to have a competitive price.
Underpricing. Some sellers are prone to underpricing their home if they want to sell it as soon as possible. They are willing to pull down the price even lower than the home’s actual market value just to ensure a quick sale.
Do Your Homework as a Homebuyer
As a homebuyer, you should do your homework and get to know the actual market value of the home that you are planning to buy. This will ensure that you will be able to identify if ever the seller is trying to overprice the home.
You should also engage in negotiation before closing a deal. This way, even if the seller is trying to add more to the actual value, you can still get to lower down the price. You should also be careful for homes that are underpriced. There may be some problems with the home that’s why the seller is very keen to sell the house right away. As a homebuyer, you should pay only the most reasonable price for the home that you are buying.