How to determine the value of your property
Although nowadays you can ask an appraiser how much your property is worth, beforehand you had better to get your own overview about the respective figure. Certainly it should not be precise, for your own comfort you can just determine the range within which your property value is supposed to lie.
The same thing should be done while dealing with a real estate agent. If he / she promises to sell your property for a very tempting price do not forget to take off your rose-colored glasses.
These people's intention is to attract a client, therefore they are willing to give you any number you want to hear knowing that after a few months of vain efforts you will have to accept the price 20-30 % lower than the initial one.
To help you set a realistic price and derive benefits from specifics of your property, awareness of market situation and time availability we presented several price strategies below.
According to it the selling price is dependent on the time you're willing to wait till your property is sold. If you plan a quick sale (within one month), you should set a price approx. 5 % below market price. If the market is rapidly growing, the mentioned discount is not needed.
If you're willing to wait for 2-5 months and your property is not considered exclusive you can stick to a market price (may be successful in case of market growth or at least stagnation). If you own property which can be reckoned among luxury or historic real estate, you will have to wait more than half a year if you want to receive a fair return on it.
However be careful to use this strategy in cases other than specified ones: your property can receive a nickname “ležák”(slow seller) what will discourage potential buyers from buying it.
Strategy of unsteady market
It's used when the market is rapidly growing or on the contrary falling sharply. In both cases the principle of price calculation is the same: you take expected annual growth rate, divide it by twelve months and multiply the resulting figure by the number of months your selling process is expected to last.
It's usually preferred by the people who like to risk. At the beginning you intentionally underestimate your property value and as a result attract numerous buyers. Then you start to derive the benefit of high competition by slowly revealing new and new advantages of your property emphasizing that they should be financially rewarded.
Usually already the first offers raise a price to a market level. However it's not a limit for people who have highly developed negotiation skills and pleasant way of persuasion.
Trade margin strategy
The price is based on the real costs you've born (the price which you've paid for your property + renovation costs) excluding depreciation and adding markup. Although at first glance this method doesn't take into account market situation you can adjust size of wear and tear and margin to current economic conditions and buyers' financial abilities.