Real Estate Basics: 5 Factors to Consider for Setting Up A Reasonable Price

Convincing someone to buy what you’re selling – is not easy. If it was, the door-to-door salesmen wouldn’t have to leave your doorstep disappointed.

Same happens in the real estate market. Most of the deals go uncertain because the broker is trying so hard to sell the property that he forgot to show the client how good the property is. That’s why, even after setting a good price for the property, your client thinks of it as being “too much.”

But if you can explain your price to the client, he might get interested in the deal. But how do you explain the price?

Simple, explain why you have picked this price and why is it a reasonable price for you. The best way to do itis by highlighting the facts that affected your estimate.

Here are the factors that should affect your number:

  1. The reason for selling the property

The reason behind selling a property affects the price greatly. You must understand the reason for selling it and convince the client too. If you are selling to get rid of the property because it costs much for maintenance and it’s not making any profit for you, set your bar low. However, if you have an eye on another great property and you are selling this one for the cash, let your client know. Otherwise, he’ll think you’re selling it because you are trying to get rid of it.

I know that many people will say it’s not a good idea to put the reason infront of the client, but I say “why not?”

  1. Location is important

Location is another major factor for a real estate deal. It affects the price and the deal directly. But you can’t do anything about it. The best you can do is finish your research on the neighborhood and come up with a reasonable rate for the property.

  1. The condition of the property

Look at it. What do you think? Can you sell it without renovating? If yes, then good. But if it needs renovation, bear the cost in mind while putting up the price.

Sometimes your property might just be an old brick-on-brick structure. In such cases, don’t push too hard for a high price because your property won’t be worth the price to your clients.

  1. Accessibility

Like the location, you can’t help with it either. You can’t change if there is no shopping mall or school in the neighborhood. However, if there is everything from gym, school, mall, and restaurant plus the public transportation is good, feel free to increase the number because all those things matter to the people who are buying it.

  1. The total cost of selling

At first, it will be difficult to estimate the amount that was spent on the property for selling it. However, once you know what to include in the cost, things will get easier. Besides, this cost of selling helps you determine a price for the property.

This cost should include:

  1. Commission for the agent
  2. Remodeling costs
  3. Taxes
  4. Advertising cost
  5. Property inspection reports and others

Now, set a good price for the deal

Once you put a reasonable price on your property, clients will come running for the deal. However, you should also keep room for negotiation. But remember, don’t oversell it. The people who are talking to you about buying the property would have done their research on their way. So, don’t expect them to take your deal at an unfair price. Also, don’t undersell it. You got to make some profits, right?

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