{"id":1563,"date":"2023-05-10T08:24:20","date_gmt":"2023-05-10T14:24:20","guid":{"rendered":"https:\/\/www.century21yk.ca\/blog\/?p=1563"},"modified":"2023-05-10T17:59:54","modified_gmt":"2023-05-10T23:59:54","slug":"moonshot-pricing-is-a-risky-business","status":"publish","type":"post","link":"https:\/\/www.century21yk.ca\/blog\/2023\/05\/moonshot-pricing-is-a-risky-business\/","title":{"rendered":"“Moonshot” Pricing is a Risky Business"},"content":{"rendered":"

This year\u2019s real estate market has me thinking about the popular motivational saying, \u201cShoot for the moon, for even if you miss, you\u2019ll land among the stars.\u201d\u00a0 This is a useful idea in some aspects of life, but it doesn\u2019t transfer into the real estate world all that well.\u00a0 Or at least, not until we tweak the phrase a bit. \u00a0If you shoot for the moon and miss, will you ever really land?\u00a0 You might just float in space forever.\u00a0 And if you do land among the stars, it may be millions of years after you had hoped to land, and it won’t be a very pleasant landing.\u00a0 “Don’t shoot for the moon lest you miss and land among the stars,” is less cheery, but it is useful in the real estate industry.<\/p>\n

This will be the first year in a long time in which many of the homes that come to market in Yellowknife simply will not sell, for a couple of reasons.\u00a0 For one thing, due to interest rate increases, the market is slower and inventory is building up \u2013 there are roughly twice as many homes for buyers to choose from as last year at this time.<\/p>\n

\"\"But equally as important in my opinion, because of changes within our local real estate industry, buyers are now all working with their own expert representatives \u2013 \u201cbuyers\u2019 agents\u201d – who scrutinize the heck out of prices and will not (the good ones at least) let their clients overpay for homes.\u00a0 Our brokerage introduced buyer agency to the NWT in 2012, but it wasn\u2019t until late last year that it was finally adopted by our local real estate board as the default relationship between buyer and Realtor.<\/p>\n

This is an important change to understand, and it\u2019s what is top-most in our minds when we advise you on price.\u00a0 When a C21 Prospect Realty agent provides you with a Comparative Market Assessment, we are not telling you what your home is worth \u2013 we don\u2019t have a crystal ball and there are too many unpredictable variables to be certain of what will happen during the listing period.\u00a0 What we are doing, rather, is telling you your home\u2019s perceived value.\u00a0 And by \u201cperceived\u201d, I don\u2019t mean perceived by your neighbour, or your close friend who hopes to continue to get dinner invites, I mean the value as perceived by all the other Realtors in town whose job it is to scrutinize your home\u2019s price and to make sure their clients don’t pay above market value.\u00a0 That is our \u201ctarget audience\u201d \u2013 other real estate market experts.<\/p>\n

Can we sometimes sell your home for more than what buyers’ agents perceive to be its value?\u00a0 Absolutely, but to attempt to do so from the outset is very much like a moonshot.\u00a0 We might get lucky and find that one buyer for whom your home is truly ideal (I think of it like trying to sell a Barbapapa house – kudos if you get this reference).\u00a0 And this theoretical “perfect” buyer may be planning to live in it for decades, which makes overpayment more palatable.\u00a0 But if we aim for the rare ideal buyer and miss, we may end up losing the interest of the broader home-buying public, and then we have to start dropping the price to get their attention back.\u00a0 This often results in a sale price that is lower than what might have been achieved had your home been priced closer to its perceived value when it was first listed.\u00a0 Or, in a worst-case scenario, we might end up like David Bowie\u2019s Major Tom, floating out in space forever, with your home unsold and with interest declining by the day.\u00a0 Or at least until next spring when we re-list, hopefully at a better price.<\/p>\n

Getting your price right from the start is incredibly important.\u00a0 But with that said, not all Realtors are great at pegging your home\u2019s perceived value.\u00a0 This is something we are particularly good at within our brokerage and we have the numbers to back it up.\u00a0 It takes hard work and it sometimes requires uncomfortable conversations to price a home appropriately.\u00a0 Whether in Yellowknife or elsewhere, some Realtors would rather simply tell homeowners what they want to hear.\u00a0 It’s just an easier conversation to have.\u00a0 They will not provide you with a physical document laying out a detailed pricing strategy \u2013 they may show you a few feature sheets but will mainly defer to your opinion of your home\u2019s value.\u00a0 \u201cHow much do you want for your home?,\u201d they will ask you. And then they will do their level best to achieve your pricing goal.\u00a0 Not the end of the world if you happen to be very objective and knowledgeable, but that’s not the case with most sellers and is one of the main reasons you hire a Realtor in the first place.<\/p>\n

Moonshot pricing is a risky business.\u00a0 It\u2019s not impossible that it will be successful, but the higher you aim, the lower your probability of success.\u00a0 It is your listing agent\u2019s job to get you the highest price possible for your home.\u00a0 But shooting for the moon only to sell it later for less than we might have with a better pricing strategy is a clear example of us failing at our job.<\/p>\n","protected":false},"excerpt":{"rendered":"

This year\u2019s real estate market has me thinking about the popular motivational saying, \u201cShoot for the moon, for even if you miss, you\u2019ll land among the stars.\u201d\u00a0 This is a useful idea in some aspects …<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[53,54,55],"tags":[84],"class_list":["post-1563","post","type-post","status-publish","format-standard","hentry","category-education-and-advocacy","category-market-analysis","category-protect-your-investment","tag-pricing-strategies"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/posts\/1563"}],"collection":[{"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/comments?post=1563"}],"version-history":[{"count":57,"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/posts\/1563\/revisions"}],"predecessor-version":[{"id":1627,"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/posts\/1563\/revisions\/1627"}],"wp:attachment":[{"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/media?parent=1563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/categories?post=1563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.century21yk.ca\/blog\/wp-json\/wp\/v2\/tags?post=1563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}