Emotional Inflation - How to be realistic when it comes to selling your family home.

Erin Best is REW's Managing Broker and Partner Success Manager.

Date06.03.2024
Words byErin Best
Emotional Inflation - How to be realistic when it comes to selling your family home. hero image
INTRODUCTION
One of the hardest things for a seller to do in any market is to price their home. It’s especially hard when it’s been the family home for years.

So many sellers think their home is worth more than the market can support. I get that. “Our home is amazing! Everybody will love it as much as we do.”

Over the course of my career I’ve heard sellers say:

“It’s a great family home. It’s served our family so well - everyone will be able to see it the same way.”

“It’s the first home we bought together.”

“The kids had so many sleepovers in the basement. Our house was always full with our kids’ friends.”

“We maintained it over the years. A well maintained home is better than new construction homes or a flip”.

Your home is worth more to you because you loved it so much. In real estate, we call this phenomenon “emotional inflation”. Does this mean these features shouldn’t be included in your home’s listing description or marketing plan?

Definitely not.

Telling your home’s story.

One of the best questions your listing agent can ask you is 'What feature of your home did you end up loving, even if it wasn’t on your radar when you bought it?’

I love this question because it allows an agent to highlight features that may not otherwise be marketed. Marketing a home’s features is not just about the quartz countertops, the new carpet and thousands of dollars put into landscaping. It’s about telling the home’s story to buyers. Full disclosure, these features may not fetch you more money, but rest assured, buyers often feel a connection to homes that tell stories.

Regarding pricing, though, the only thing that matters is the current market conditions at that time. Essentially, what has the competition sold for?

Buyers typically won’t write offers without looking at the same information you’ve looked at when you priced your home. They’ll know if your home is priced at fair market value or not.

Determining the right price.

Here is how the good agents will approach pricing your home:

  • They’ll show you what has sold in your area to determine where your home will fit into the market. As a local market expert, they meticulously research recent sales data, current market trends, and comparable properties in the area to provide sellers with a clear understanding of the local market dynamics in real time.
  • An important aspect of the listing presentation is educating sellers about the intricacies of pricing a property. Good agents will take the time to explain the difference between list price and market value - and even your city assessment value. They highlight the importance of setting a realistic price based on current market conditions and buyer demand. Empowering sellers through education, agents guide sellers towards making informed, realistic decisions and temper expectations throughout the selling process.
  • Top real estate agents tailor their marketing strategies to each individual property and seller's goals. During the listing presentation, they present a customized marketing plan that outlines how they will showcase the property to potential buyers effectively. They know what platforms are used the most when buyers are searching for homes. A comprehensive marketing strategy can include (but isn’t limited to) professional photography, virtual tours, targeted online advertising through platforms (REW.ca), open houses, and networking with other agents.
  • Good agents are going to differentiate themselves by highlighting the value-added services they provide beyond just listing the property. It’s easy to put a sign on your lawn, and wait for buyers to show up. Don’t get burned by a ‘list it and leave it agent”. Good agents know the value they bring to their sellers. Whether it's staging advice, home improvement recommendations, or negotiation expertise, agents demonstrate how their unique skills and resources can maximize the property's appeal and value in the eyes of potential buyers.

Overpricing a home can have significant consequences, including extended time on the market, reduced buyer interest, and ultimately, a lower selling price. As a seller, you can take proactive steps to avoid this pitfall and set realistic listing prices based on market data and expert advice. For buyers, understanding these factors can help navigate the market more effectively and identify opportunities for negotiation and value.

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