My villa is worth a million dollars! Really? – How to determine the value and how to know the current market price? This blog about My Villa is Worth a Million Dollars explains it
Entering the market with the wrong pricing can be fatal, especially in Bali, where supply is so great, and buyers are on the lookout for who is most motivated to sell.
We hear this a lot “My friend told me a villa in my neighborhood sold for more than a million dollars, so my million dollar price is reasonable compared to his.”
Many vendors in Bali think this way, but unfortunately, it’s not the way to go.
What many property owners don’t realize is markets change very quickly. What happened three weeks ago is often outdated now. Today is a different market for yesterdays.
Supply and Demand
When it comes to valuing a property, one of the easiest ways is to compare prices of what’s recently been sold in the neighborhood.
But there’s a catch.
Marketing a property above or below the most recent sold prices to test the market can sometimes be a mistake because the amount you enter the market with determines how people perceive and receive the offering.
And the wrong price is the kiss of death.
A perfectly good example is when a vendor wanting to sell his home approached me recently. It really was a beautiful property full of modern touches and lovely gardens.
We discussed the value, and of course, he had a figure in mind and wouldn’t listen to my professional opinion. I ended up refusing the listing and asked him to contact me in six months, knowing that it wasn’t going to sell at the price he was expecting.
Six months went by, and the property remained unsold. No surprises there then.
First Impressions count
I contacted him and asked if he still wanted to sell, and if he would now consider reducing the price. He reluctantly agreed, and we moved forward.
But here’s the thing. The initial price he went to market with created a wrong first impression. It was clearly over-priced, and everyone knew it. And now he was reducing the cost, potential buyers saw a desperate vendor and also an opportunity to negotiate down even further. The low-ball offers started rolling in.
None of these low offers were accepted. Maybe the vendor’s pride was hurt, but the truth is by entering the market with an over-priced property he’d shot himself in the foot! And it would be difficult for him to recover and keep a smile on his face.
A lot of the time, the price you want is a price you can’t get because the market is not willing to pay it. Something is only worth what someone is willing to pay!
If you’re thinking about selling your property, my advice would be to listen to a professional who knows the market, he or she will definitely be able to help you determine a price that’s attractive enough to get attention, the question is: are you ready?
source Harcourts Seven Stones