As a seller, you may assume that pricing your home is easy. However, you cannot just slap a price tag on a house and expect it to sell. There are a lot of variables that must be involved to find the right price.
Although most sellers are unaware of pricing, the buyers are worse. A lot if not all buyers think sellers or agents simply decide what to price a home. But keep in mind a house price has to be in sync with the market value as well as satisfy the mortgage interest rate.
Buyer’s Assumptions
As a buyer, you’ll assume that your seller is trying to charge you the highest amount they can think of. Although this can be true with some sellers, it doesn’t apply in the industry.
Before a house is put in the market, it needs to be valued. Therefore, a valuer will estimate the price of the house in regards to the market value of surrounding houses, reduced rates, where the house is located, distance to local/basic amenities among other aspects.
Taking an example of Kenyan buyers who convince themselves that the market value doesn’t exist and what they know is what is right. Buyers who saw a price on the internet and assume all property is priced as such. Most buyers are more or less ignorant when it comes to a market. Hence, they do not understand especially real estate where it’s a whole complex world.
Keep in mind that these are the same buyers who will claim they have been duped. When a friend tells them they bought a house at the same place but a slightly different price. Most individuals ignore aspects leading to the pricing such as the seller may be required to pay off his mortgage loan as well as gain profit hence the house will be priced higher than others.
What as a buyer you should know about house pricing:
The market value
The is the amount a property can be sold for in the real estate industry. For example A neighbourhood like Runda where a 3 bedroom maisonette can go for a price of 25 million-50 million, the agent/seller will price their house along with that range.
Supply and Demand
The supply and demand chain is a great factor when it comes to house pricing especially in an unstable market. If the demand is too high, the seller will increase the price and if the demand is low the price will shift. This also applies to supply; where the supply is a lot the price will be lesser than when the supply is on the low.
Location
Sometimes people what to buy a house because of where it is located like in a posh neighbourhood such as Kileleshwa or Karen. Looking in the Nairobi real estate scene, most developers charger higher because of its simply Nairobi, just the name.