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For what it's worth

How much to list your home for? Listen to the experts

Helen Morris, National Post · Friday, Oct. 22, 2010

Putting a price on what is likely your most valuable asset can be tricky, especially if you have lived in your home for a number of years and done it up just the way you want it. In your eyes, it may be the best home on your street. When it comes time to sell, perhaps to move to a new job or give your growing family more room, it is hard not to take it personally when your realtor rolls up and suggests that it is worth $100,000 less than the sale price you had in mind.

“People get it into their head that ‘My house is worth whatever [I say] it’s worth,’” says Laurin Jeffrey, a real estate agent with Century 21 Regal Realty in Toronto. “No matter who you are, you always think your place is the best. It’s not a slight [against other homes], it’s human nature.”

However, if potential buyers do not feel quite the same way about your magnificent home as you do, you could find yourself waiting in vain to secure a sale.

“If you can’t sell your home, it’s usually because of the price,” says Mike Galivan, a real estate agent with Prudential by the Lake Realty in Burlington. “If there is no obvious reason like [needing to] de-clutter or bad pet odour, then it’s price. What someone is willing to pay is what determines the value.”

Mr. Galivan says that unless your property has a unique feature such as an indoor swimming pool, which may only appeal to a limited number of buyers, it should be fairly straightforward to pinpoint the value of your property and, subject to market conditions, secure a reasonably quick sale.

“If I don’t get a showing in a week, there’s a problem. You should be getting at least a showing a day; if you’re not, then your price is way off,” says Mr. Jeffrey. “If you’re getting 10 a week and 50 people are coming through in a month and it hasn’t sold, then it’s obviously not just the price … they’re coming and looking, but for some reason they’re not pulling the trigger.”

Mr. Galivan and Mr. Jeffrey say there may be issues unique to each property that are putting off the buyers, but they argue this is usually something obvious such as that old pink carpet, the aging roof or the poor paintwork.

No matter how you look at it, Mr. Jeffrey say, you are really still talking about price.

“If your home is not moving for the price you’ve got it at,” says Mr. Jeffrey, “start sprucing it up; add value for the money. If you don’t want to change the price, then you have to give people more for the money to justify it.”

Mr. Galivan warns clients unwilling to drop their price that the longer a home is on the market the less bargaining power they have with buyers.

For those sellers unwilling to shift on price, there is the option to move to a new home and rent out the old one until it sells at the price they want.

However, financial planners caution anyone thinking of going this route to take a hard look at the costs.

The main question to ask is “What does it cost me to keep [my existing property and rent it out] versus how much would I have had to reduce the price in order to sell it,’ says Tannis Dawson, senior tax and estate planning specialist with Investors Group Financial Services in Winnipeg.

Ms. Dawson says potential sellers must consider capital gains implications (when selling a home that is not a primary residence), the time and cost of keeping a second property, as well as whether you can in fact afford to support two mortgages. Your calculations may reveal that the prudent choice is to lower the price on your home, secure a sale and move on.

Posted on Monday, October 25, 2010 at 01:44PM by Registered CommenterElaine in | CommentsPost a Comment | References1 Reference

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