Posted on 24 October 2012
This article is about Turkey, but it could be about anywhere, sellers make the same mistakes and the same principles apply to selling a house pretty much everywhere.
The best piece of advice that anyone can give to a seller is to get their asking price right the first time. A home for sale receives its widest and best exposure in the opening 2-4 months of being on sale. If the price is wrong during this period the chances are they have lost out on achieving their best sale price. Don’t forget, if your home is too cheap multiple offers can drive up the price, but if it is too expensive the chances are most buyers will just move on to the next listing.
You have to price to sell; price to attract buyers is more apt. But how do you know what the right asking price is?
How to Value a Home in Turkey
A house is worth what a buyer will pay for it, not what the seller thinks it is or wants it to be. A seller might think his home is worth more than the one next door because you added a swimming pool, but if you added that pool in an area where most buyers would prefer a generous garden with a good lawn then it would only sell for less than the neighbouring home.
To sell a home in the sellers own country to local buyers, sellers should look at actual sale prices of comparable homes in their area to determine how much their home is worth. If local prices are falling they aim to price below the competition and if prices are rising they can come in at the comparable value or slightly above if they wish. Slightly above still puts them in the right range to attract buyer attention.
Turkey has a big foreign market, which is very different to the domestic housing market. It is not so much that foreigners pay different prices, – although they do if they don’t do their research properly – but more that foreigners are actually seeing and looking to buy different properties. Developers often create developments specifically for the foreign market and vice versa. Judging by the fact you are reading this article on this site, you are probably a foreigner looking to sell a home in Turkey, which means it is probably a home built or geared towards the foreigners market. In any case you will want to sell it in this way, because for a foreigners analysing sale prices in the local area is problematic.
However, the way to ascertain a good asking price to attract foreigners is a very similar principle. It is about supply, demand and competition. If there are a lot of similar homes on the market in the same place at the same time it will drive prices down, and if you want to sell in a reasonable amount of time you need to come in well below the competition in your opening sales drive, as you will rarely get a second chance to get it right.
This can be overridden if that market is extremely popular, and/or you have a very unique property with strong selling points that really set it apart from the crowd.
If there are very few properties for sale in the same area as yours then this doesn’t automatically mean you can price at the comparative level or higher. It depends on demand in that area. If there is very little demand in that area then the way to get a sale is to price below the competition. If you find that you are in the rare position of having one of the few properties in your area looking to sell, and that area is also currently popular with foreigners then yes, you can price above the competition and still stand a good chance of selling in a reasonable time frame. Though, for obvious reasons this set of circumstances is very rare indeed.
The best way to find out how much competition your property will have is to research the property portals. As today’s market is pretty much dominated by Russians and Eastern Europeans then you should check the foreign language portals as well as those in your own language.
It will be easy to accuse us of bias here, but you really are better to ask the agent what price you should sell your home at. A reputable agent with extensive knowledge of the market is best placed to know what price to put your home in at off the bat, not just because of their expertise and market knowledge, but because they have no emotional attachment to your property. However, it can’t do any harm to have a look at the portals first, believe me, if your market is saturated with similar properties a look at the portals will leave you in no doubt about it and you will know to price low before talking to an agent. But if it is less obvious what the local market is doing, you are definitely better to seek guidance, because, as I said, if you price wrong in your opening market push, you miss your best chance to sell.