I spend a lot of time in my blogs on pricing and other pitfalls in Mexico real estate because pricing in particular is such an essential ingredient in all transactions.
Pricing should be based on a total market overview and should include sales price data, location of comparable properties and the amount of inventory in the specific market and the general area.
For a specific property, value includes exact location, view, and general condition of the property, amenities -including parking – and price in comparison to other comparable properties.
Basing your price on seller needs or emotion rather than market value is a mistake. Realistically you cannot set your selling price based on how much you paid for or invested in your property.
If your villa or condo is not priced competitively, buyers will reject it in favor of others in their price range. Buyers who should be looking at your property will not see it because it is priced over their budget. Your property can be on the market too long.
When the price is eventually lowered, buyers are wary because “nobody wants to buy a property no one else wants.” The end result is low offers and an unwillingness to negotiate.
Every seller wants to gain as much money as possible from the sale, but a listing priced too high often eventually sells for LESS than market value.
Here a few key things to remember: 1) The need for money has nothing to do with a property’s current market value, and 2) Personal attachment to the property does not affect value.
Sellers Should Avoid:
1. Over-improving the villa or condo prior to selling. There is a difference in upgrading your home for your personal enjoyment or doing upgrades you think will increase the selling price. If you are thinking of selling, you should be aware that only certain upgrades are cost effective.
2. Choosing the wrong Broker. Many homeowners list with the agent who tells them the highest price. Choose an experienced agent with the best marketing plan to sell your home. An agent with many successfully closed transactions usually costs the same as someone who is inexperienced. Their experience can mean a higher price during negotiations, selling in less time and a minimum amount of hassle.
Agents Should Avoid:
1. Using the “Hard Sell” during showings. Buying a home is an emotional decision. Buyers like to “try on” a property and feel comfortable. It is difficult to do if you follow clients around pointing out every improvement made. Allow the buyers to discover the property on their own. Point out only features you are sure are important.
2. Overselling loses many sales. If buyers think they are paying for features that are not particularly important to them personally, they will reject the home in favor of a less expensive home without these features.
As super salesman and motivational speaker Zig Ziglar said, “Every sale has five basic obstacles: No need, no money, no hurry, no desire or no trust.” Good words to remember.
This article is based upon public information and my personal experience in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.