You own a property and you want to sell it? Setting the selling price of an apartment or house is not the easiest step. Indeed, there is the psychological and emotional price at which you would like to sell your property, a price that is often far from the reality of the market. What matters is the rational price determined by known factors and it is these that must be taken into consideration. There are therefore, some essential parameters to consider before setting the sale price of a property.
The evolution of the real estate market
The evolution of the real estate market is the first factor to consider when determining the selling price of your home. Almost all cities experience a fluctuation in the price of real estate over time. These are trends that themselves respond to other factors such as supply and demand, for example. When the market experiences a rise in prices, the advantage is given to the owners. Sometimes some cities lose some of their attractiveness and popularity and prices drop. If your apartment or house is in an area where the trend is rather downward, you will have to be resilient and you will not really have any choice but to follow the evolution of the market, even if it does not please you. In short, you must adjust the selling price of your property according to the general trend in your municipality. In addition, it is very important to know how to be responsive and to adapt the price very quickly in order to sell your property faster
The characteristics of the accommodation
The characteristics of a property are other factors that determine the selling price. Know that future buyers will also take them into account before making a decision. Additional services are balconies, terraces, gardens, swimming pools, parking spaces, etc. In short, anything that adds value to your apartment or house compared to other properties offered for sale on the market.
If your property meets one or more of these criteria, you may want to consider setting a higher selling price.
Having a terrace or garden is a considerable asset in the estimation of your property, especially if it is located in an urban area. On the other hand, if your apartment or house does not have outdoor space, we advise you not to overestimate its price.
The orientation of the property (North, South, East, West) is also a factor to be taken into account. The sunshine is not really the same if the property is oriented to the North rather than if it is oriented on an East/West axis. It can also impact the sale price of your property.
Energy performance
Before selling a property in the old, it is essential for the owner to carry out a home energy audit. If your apartment or house has a good energy rating, you can get a higher price. Indeed, it is a criterion very scrutinized by buyers at the moment and for good reason! The price of energy has soared in recent months and future buyers do not want to invest in thermal sieves that will cost them a lot of money in electricity and gas.
In addition, as a real estate investor, it is also time to buy properties that do not require major energy renovation work. The National Initiative to Advance Building Codes, effective in June of 2022 adopts the latest, current building codes and standards for modern buildings. Owners and investors must therefore act quickly and carry out renovation work to make their homes conform to the rental. Thus, investors see the final bill increase, which obviously curbs their desire to buy property in the old.
The notion of green value is thus becoming increasingly important in real estate. As a result, an energy-efficient home could potentially be sold for more than a non-energy-efficient home. But it also depends on the real estate market in which your property is located. It should be noted that in some areas, the green value of a property will not necessarily have a significant impact on the sale price.
The general condition of the property
The price of your property will also not be the same depending on whether it requires renovation work or has been refurbished before the sale. Be aware that housing with work is often sold cheaper, because it is necessary to take into account the price of the work that is the responsibility of the future buyer. When it comes to a lick of paint or small repairs, it is better to carry out this type of work before the sale to make a good impression on future buyers and put all the chances on your side during visits. The property will show better with a refresh, rather than if it requires major renovations
As part of larger renovation work (upgrading of electricity, renovation of the roof, change of the boiler, etc ...), the majority of real estate experts advise to quantify the amount of work upstream to inform future buyers of what awaits them. It is also a way to be completely transparent with them and they will undoubtedly appreciate the process.
If you sell to an investor, he will also appreciate having an estimate of the amount of work. Indeed, by carrying out the renovation work himself, he will be able to deduct the costs from his rental income taxes. This will allow him to have a clear understanding of the work required.
In addition, your property can benefit from a discount or a premium depending on its defects or assets.
The location of the property
The location of your property largely impacts the price of it. If it is in a neighborhood that is highly sought after and where supply is lower than demand, its cost can very quickly increase. On the other hand, if your property is in an unattractive area, you will most likely have to lower the selling price to find a buyer.
Anyway, you will first need to inquire about the current price per square meter in your neighborhood to get a general idea of the selling price of your apartment or house.
Note also that even if your property is in a city where demand is high, there may be significant price differences between neighborhoods. The proximity of shops, schools, green spaces and public transport, for example, can vary the price. Hence the importance of having a local estimate of the price per m² of your property. However, to avoid being light years away from the fairest selling price, you can call on real estate experts who will estimate your apartment or house and who will be able to define a price in accordance with the realities of the market but also the characteristics of your property.
Contextual and cyclical factors
The main factors have been mentioned above. But it is worth explaining that increases in house prices are also due to contextual and cyclical factors such as lower interest rates, easy access to mortgages, rising incomes and population growth. All of these can lead to higher demand and higher property prices if housing supply does not respond quickly enough to rising demand. On the other hand, a decrease in demand and an increase in supply will rather have the effect of lowering prices. Thus, the price of real estate is also determined according to supply and demand. The price of real estate varies according to demand-side factors, whether internal to the country or external, whether they directly affect families or real estate.
Key points to remember about contextual and cyclical factors:
- Demand responds to population growth or decrease
- The higher the wages, the more likely people are to buy
- The stability of a country's economy depends on internal factors but also external factors, which directly impacts the real estate market.
- Changes in family structures (family with one or more children, stepfamilies) have an impact on the demand for a specific type of housing (properties with two bedrooms, three bedrooms or more)
- Demand is constantly changing as needs are constantly evolving. What is observable at the moment is not immutable.
To summarize, the factors that determine the price of a property are both internal and external to the state of the property. Everything related to the housing itself (general condition of the property, painting, electrical installation, boiler, etc ...) is your responsibility and you can improve these factors if you wish to sell your property at a higher price. On the other hand, external factors such as the evolution of the real estate market, the location of the property and contextual and cyclical factors are not in your hands. These factors determine the price of your apartment or home, and you need to take them into account when determining the sale price of your property. In any case, to be sure to offer your property at the fairest price, it is better to call on a real estate expert who will provide an accurate estimate of the property in question and who will allow you to sell faster and at the best price.
