Setting the right price for your home in Curaçao is extremely important, but how do you determine it? New-construction homes generally have a fixed price that is not negotiable, while existing homes usually have an asking price. The asking price is the price at which you list your home. Your real estate agent can help determine the price and recommend the best strategy. The agent advises you, but the final decision is yours. Choosing the right asking price is essential: a price that is too low is undesirable, but an excessively high price can be equally damaging.
Suppose XCG. 575,000 would be a realistic final sale price for your home. It might then make sense to list it at XCG. 598,000. Although this is close to XCG. 600,000, it appears noticeably lower and still leaves some room to negotiate. Another important reason not to set the asking price much higher is the way buyers search. Most buyers first consult a bank to determine how much they can finance. If a buyer has a budget of XCG. 575,000, they are unlikely to view homes priced above XCG. 600,000 because those properties appear to be outside their budget.
Keep your asking price realistic. Do not expect someone to pay substantially more than the property is worth; that is extremely unlikely. You may receive no interest at all. Even if a buyer does make an offer, they may be unable to obtain a mortgage because the purchase price does not align with the market value stated in the appraisal report.
Eventually, you will still need to reduce the asking price. Multiple price reductions can cause buyers to wonder whether something is wrong with the property. The same applies when a home remains on the market for a long time. This may extend the sales process and ultimately produce a lower sale price than if the home had been listed at a more realistic price from the beginning.
Many sellers overestimate the value of their home because of two psychological effects: the endowment effect and loss aversion.
The endowment effect causes people to assign greater value to something the longer they own it. You may be extremely proud of your kitchen, for example, while other people strongly dislike its color.
Loss aversion can make homeowners who expect to sell at a loss less willing to reduce their price, unlike owners who expect to make a profit.
Would you like to learn more about market value? Continue reading here
In summary
An asking price that is too high attracts fewer potential buyers—or none at all—extends the sales process, and may ultimately result in the home selling for less.
Would you like more information about how Livinggoed can help sell your home? Continue reading here
