While I am on the record as being bullish on the current market for Westside Vancouver Condos I do believe today’s market requires sellers, and their representatives, have a well conceived pricing strategy in order to derive top dollar from the market.
The success of your sale in todays market will be the result of a number of factors. From the quality of the home itself, to its showing condition, to the preparation, marketing, and promotion of the listing materials. However, I believe at this time, the most vital of all is the presence of a well conceived pricing strategy.
There are a number of reasons I believe this to be true. Among them is the long standing fact that every listing garners the most exposure at the outset of its listing term. That is, the day it hits the MLS public sites as an active listing. This is when it comes across fellow agents hot-sheets and begins to appear in the inboxes of active buyers as a match to their home searches. This is when you have the publics, and agent eyeballs, fixed on your listing. This is when we want to capture their interest and make them move!
Furthermore, I have this hypothesis, that in todays market buyers have grown accustomed to watching only the new listings as they come out. This is because there’s been periods of time over the past years in which you needed to be in the door of that new listing on the first day of showings, and, if you liked it, preparing an offer immediately. If buyers don’t pounce on the listings as they come out it seems to me their perception is those listings they didn't move on have most likely sold and they move their attention elsewhere.
The process of.. watching new listings, attending sneak peaks and/or open houses, making or not making offers, winning or losing, only to move on to next weeks crop of new listings and do it all over again.. Has gotten ingrained into many Vancouver buyers as well as many agents. Making those early days of your listing, when all the attention is there, even more important than ever when it comes to being successful.
Therefor I believe you must hit the listing price on the mark! How do you do that?
- Gain a very clear understanding of your product
- Gain a good understanding of the likely value
- Have a clear understanding of the market conditions
- Identifying as best possible the direction of the market
- Choosing the most effective listing price to garner exposure
Some of this seems dead obvious, but I’ll be honest, in telling you it’s dead obvious that the ball is dropped on each accord on a daily basis.
First - Understanding your product.
Second - Understanding the current value.
Third - Clear understanding of current market conditions.
Fourth - Identifying the direction of the market.
- The sale ratio in the West End is 63% - This puts upward pressure on prices
- The sale ratio for 2 bedroom condos Downtown Vancouver is 39% - This should put upward pressure on prices
- The sale ratio for condos priced between $800k-$900k Downtown is 86% - This will certainly put upward pressure on prices
Therefore, the market for our hypothetical condo in the West End will be trending upwards based on all these key indicators.
Lastly - Choosing the most effective listing price to garner attention.
Now we know our product and it’s likely value today. We know the market conditions are favourable and these conditions should be pushing the price up in the near future. Time to choose the price!
It’s my belief that you’ll want to price “ahead of the market” to be most successful. That doesn’t mean $100k ahead or even $50k ahead. This is going to be in relation to your specific market as well.
I do believe it important to keep in mind how buyers search today as well. For instance, if you’ve determined the likely value of your home is $980k with the market trending upwards. Again, many factors, but I’d most likely recommend not pricing much higher than a million dollars. The reason for that being buyers of course search for listings online and in these searches will place min/max prices. If you price this listing, that you believe is likely valued around $980k, at a list price of $1,025,000, then no buyer setting their maximum price of $1 million will ever see your listing populate in their search results. That’s not good for your exposure and could likely have a negative result on the sale price.
Going back to our previous example of the 2-bed West End condo valued around $820k. I’d likely suggest a list price of $850k. We know the market is trending up specific to this hypothetical unit. We don’t want to get to far out ahead of the market and lose attention. By pricing ahead of the market but yet still choosing an attractive price I believe you protect your bottom-end while also generating enough exposure that you may still garner multiple offers. Should that happen you could then get you a price higher than you’d imagined.
This is a very quick look into some of the steps I take when establishing a price for my listings but I hope it's of value and provides you some insight into what goes into a well conceived pricing strategy.