How to Maximize Profit from Selling Your Property? From the analysis of examples based on real transactions, the do’s & don’ts to develop a winning positioning strategy.
This guide complements the in-depth article “The Right Price to Ask When You Decide to Sell Your Property“, providing practical examples and advice on what to do and what not to do to present a property on the market and achieve maximum benefits.
Have You Decided to Sell Your Property: What’s the Right Asking Price?
First things first: let’s clarify the terms. We define the “value” as the amount that can be asked for your property on the market, while the “price” is the actual amount paid at the time of the transaction. In the previous section, we discussed how the value attributed to a property can be influenced by various factors. We recommend reading it before proceeding. Below, we will illustrate through practical examples the different outcomes achieved in two transactions, with or without the application of a proper positioning strategy.
Common Example: Owner’s Subjective Value Exceeds Objective Estimate by Over 20%
The graphs below show the historical series of valuations and price history for a farmhouse sold by our group in 2019.
- The evaluation conducted by The Best Price system of Great Estate in 2017 attributed a value of €950,000 to the farmhouse;
- The owner chose to list the property on the market at a value of €1,350,000 (+ 47% compared to the estimated value);
- The farmhouse remained on the market for 30 months, during which time the estimated value naturally declined in relation to market fluctuations;
- The sale took place in 2019 for €800,000 (– 15% compared to the estimated value).
For the owner, none.
The numbers demonstrate how the subjective value can negatively impact the outcome of the sale. Believing that there exists a buyer who will “fall in love” with the property and is willing to invest any amount the owner demands is the worst approach to take when entering the delicate positioning process. Instead of being a strategy, it’s an illusion that leads to certain losses.
Of course, people who decide to purchase valuable assets like a luxury property are also driven by the charm exuded by the beauty of the place, the landscape, and the atmosphere. Any customer who buys a property falls in love with it. However, beyond emotion, the buyer’s choice is also motivated by the perception of making a good investment. After the excitement of the first visit, a more rational approach takes over, supported by sources of information accessible to everyone through digital means: comparing with other properties on different platforms, calculating additional expenses, assessing the property’s maintenance and renovations, and the completeness of the available documentation.
Positioning a property today at a value in line with the market communicates to potential buyers that it’s a advantageous investment right away, setting it apart from most other offers.
Here’s what happens to those who decide to approach the sale without adopting a rational strategy.
- Seeing the value of their property decrease year after year.
- Continuing to invest in maintaining the property’s image and appearance, or stopping these efforts, leading to further loss of value.
- Believing, or rather deluding oneself, to have a certain budget (in the example, over 1 million euros), when in reality, the final revenue will be significantly lower.
- Keeping the property on the market for too long, causing damage to its image that generates mistrust among potential buyers.
- Undervaluing the property, gradually reducing its value to create an expectation of further decline among interested parties.
- A downward negotiation: the few potential buyers, having access to information on price changes over time, will be suspicious and hesitant to pay the requested value and might present an even lower offer.
95% of properties on the market are not sold primarily for this reason: the subjective value identified by the owner, often without specific expertise, exceeds the objective estimate by over 20% prepared by industry professionals.
Example to Follow: a Proper Positioning Strategy
This example presents graphs related to the valuations and the asking price for a property in Città della Pieve sold by the Great Estate group to British buyers in 2018.
- The evaluation conducted by The Best Price system of Great Estate in 2018 attributed a value of €900,000 to the farmhouse (not very different from the previous example);
- The owner chose to list the property on the market at a value of €1,000,000 (+ 10% compared to the estimated value);
- The farmhouse remained on the market for only 4 months;
- During negotiations, the sale price was negotiated down to €900,000, exactly the same value as estimated by the evaluation.
It might seem like the owner “lost” the difference between their subjective value and the asking price, but this latter value corresponds exactly to the objective value of the farmhouse. Compare this example with the previous one and it will immediately become clear which of the two strategies was better: based on the evaluation, both owners had the potential to receive between €900,000 and €950,000; the first property underwent a devaluation that accumulated over 30 months of maintenance costs, while the second was sold at the right price in just 4 months.
1) Selling at the best price before the property’s value starts to decrease year after year.
2) A sustainable investment in maintenance and taxation costs for a few months.
3) Having a budget very close to expectations, in this example €900,000 received in the same year.
4) Possessing a remarkable market advantage, offering buyers the perspective of a real deal, since many other similar properties are objectively overpriced.
5) Upward negotiation: the few interested buyers, having access to comparison data among different properties for sale, and noticing a value in line with the market, will be motivated to act as quickly as possible to not miss out.
6) An excellent reputation stemming from the request for an honest and fair value, demonstrating respect for oneself and the future buyer.
Here are the advantages you can obtain by relying on a professional, objective, and transparent method to strategically position your property. Our own clients demonstrate this, as they share their point of view on this sale in the interview with the former owner of the “La Quercia Illuminata” farmhouse.
Are you still considering selling your property at the highest price?
Explore the dedicated services for sellers and The Best Price valuation system: visit the website or contact your trusted Great Estate consultant.