Condo Selling 101

Watch The Market

The listing price of your condo is very dependent on the market. And the market is ever-changing. So it's important to watch the local listings and sales, as well as the local economy, to see what is going on in your area. In doing this you gauge what you might expect to get for your place and determine a price range that's inline with real estate trends.

To start, figure out what type of market you are dealing with - Buyers, Sellers or Balanced.

A Buyers Market results from a limited number of home buyers and a large inventory of homes up for sale. When this situation occurs, seller competition becomes high as sellers vie for buyer interest. It is not uncommon for home prices shift down to attract buyers searching for the best deal. Extra incentives are also a popular tactic to gain buyer awareness. You'll see offers like "closing costs covered by seller," "big screen plasma TV included," or other enticements that do not require the seller to lower the price but offer the buyer some added value. A Buyers Market often goes hand-in-hand with a declining local job market as there are fewer people who can afford mortgages.

A Sellers Market results from a large number of buyers looking to purchase and a limited inventory of homes for sale. When these circumstances happen, buyer competition is high and can lead to bidding wars. In a Sellers Market, buyers have less negotiating power because there are often multiple offers on a single property and the sale just goes to the top bid. This type of real estate market is usually triggered by an expanding local economy that has new jobs and more businesses, which brings new residents to the area who need places to live.

A Balanced Market is when there is a big enough inventory of unsold homes to satisfy buyer demand without being competitive on either the buyer's or seller's end. Typically, 5-7 month's supply of unsold homes is considered a balanced market.

Real estate and economy new reports will tell you what type of market we're in. As you can see from the above summaries, it does impact your condo's value and how you should go about selling your home.

While doing your market homework, take a look at what other similar size condos in your location offer buyers. Compare your condo with current listings in terms of amenities and finishes. If practically every unit in a four-block radius has been rehabbed with granite kitchen counters and new appliances, chances are your unit will be at a disadvantage if it doesn't have those upgrades. You need to have comparable property features to ask a competitive price. Before doing any major refurbishing, though, make certain the return on investment is worth it. In making the changes will you be able to increase the asking price enough to get your money back and make a profit? Or should you just leave the condo "as-is" and lower the asking price to compensate.

And keep this in mind: buyers typically don't purchase the most expensive property on the block. Buyers want the location. If they can get the same location for less, they will. This is something to think about whenever you make upgrades and renovations to your unit... if your condo is higher-end than others on your building or in the neighborhood it can be harder to find a buyer. It's referred to as being "priced out of the market." Basically, your home value is above what buyers are willing to pay in your area. In order to sell, you would most likely have to lower your price or wait for the market to change.

These are options you should investigate as a savvy seller who wants to get the best price possible for your condo. Couple your knowledge of the general market with what you have researched about comparable properties to appropriately price your home. Why does your listing price need to coincide with current market values? If you ignore market factors, you could price your condo too high. You do not want to overprice. This drives buyers away even before they see your place. Remember, buyers are watching the market, too, and they know what other real estate in your area is going for. It is important to take all market considerations into account when developing your pricing strategy.