How to determine the selling price?

How to determine the price of real estate?

This question has been on the mind of everyone who has faced the need to sell real estate. Let’s look at the main points after
which guide when determining the price at which it makes sense to enter the market in order to sell the property for the maximum value. There are 3-4 main principles, based on which the owner himself can decide on the amount to be used as the price in the advertisement. It is important to understand that property should be viewed objectively, not emotionally.

Offer.

Very often, when determining the price at which to sell, people only consider the first point, which is the offer. These are other similar properties that are currently being marketed. For example, if you want to sell a renovated 3-room apartment in Imanta, then you will look at similar apartments in Imanta and for what amounts they are posted on advertisement portals. This is a point that real estate agents make as well, however it is important to understand that it is not the only evaluation criteria for determining the right price and getting the most out of the market. It has been observed very often that people stopped only at this point. These ads can also be called competitors. It is ideal to choose the 3-5 most similar competing ads.

Request.

The next point is to look at the request. This is information that is always valued by industry experts. It is compared how much and how actively such and similar objects are viewed in the given segment. For example, a 3-room apartment in Imanta with renovation – how many customers are currently looking for such an apartment. This can be understood by the performance of these most similar 3-5 competing advertisements (which were determined in the first point – the offer). From these similar ads, you should understand how many calls about them, how many are viewed and what are the real price offers for these apartments. It is very valuable to understand such information in order to be able to predict how you will fare when entering the market. When seriously approaching the sale of property, most likely a deadline is set for the transaction, for example 2-3 months. If only the offer information is used and the ad is placed with a similar amount to competing properties, there is always the possibility that no one has called for similar options in this price range for 2-3 months. Therefore, it is important not only to evaluate the supply, but also market activity – demand.

Transactions that have taken place.

This information is much more specific and is available on the cenubanka.lv portal. It is possible to view all transactions registered in the land register. Using filters, it is possible to find similar properties in the database that have been traded in a specific time period. It is recommended to choose a period of about 3 months, because a longer period of time can already become biased, but it also depends on the segment. The amount registered in the land register is shown here. Transactions are often made when the property value of the apartment is stated lower in the purchase agreement, because the apartment is bought with furniture. Therefore, this list may show inadequately low amounts, so it is recommended to start with the highest transaction amounts. Since property advertisements with pictures are also visible next to transactions, it is possible to find the most similar objects/conditions to your property and gain a better understanding of the real market situation.

The X-Factor.

Although the 3 previous principles are the very basis for determining the price, there are other nuances that positively or negatively affect the specific property. These are the things that will allow the buyer to make a decision in favor of one or the other property. Various nuances in repair or planning; presence or absence of a loggia/balcony; location on the side of the elevator or opposite and many, many other details that play a role. Very often this is the most difficult part that is challenging for a landlord to evaluate objectively, so an experienced agent will be best able to comment on these things as a complex that affects the price. The easiest way for the owner, of course, is to cooperate with a professional and knowledgeable real estate agent in the specific segment, who will help with price determination. A good agent will have both the experience and resources to be able to give the appropriate price window as realistically as possible. Ideal if property valuation is being carried out. However, these resources are not always available to everyone, so it is good to understand the steps to get the most realistic price for your property.