Dear Heather,

I want to sell my home. I interviewed one agent but they did not suggest a price that I was happy with. I really need to get more than she recommended. I am thinking of interviewing another agent to see if they can come up with a better number.

Seller

Dear Seller,

I can understand you are disappointed. The market is quite “soft” in certain segments at the moment. There are a couple of things that you have written that need to be addressed.

The first is that what you “need” financially, has nothing to do with the value of your house.

The second thing, is that price and value are not the same thing.

The price is the sticker guide, the price range you anticipate people looking for a home like yours will be able to pay.

This is so that it shows up in online searches (often done in price zones, ie $500,000 to $1 million).

If your house is actually worth $965,000 and you have it priced at $1.025 million the people who would likely buy your home will not see it, as it will not come up in their searches.

This is known as missing the market.

The value is the price that a buyer is willing to pay for a property.

The closer a house is priced to its value, the quicker it will sell.

Overpricing a house means that it stays on the market longer than is healthy, and eventually the owner may end up taking it under market value, as it has become “tired goods”.

To sell your home for the most money, it is a good idea to come on to the market with all guns blazing: showing it in the best possible condition and coming as close to recommended market value as possible.

This creates a buzz in the market place which can in itself lead to the property selling for more money than it was valued at.

So how do real estate agents and appraisers come up with a figure? Agents are trained to pinpoint a home’s market value by looking at a variety of characteristics including the following:

• External characteristics: kerb appeal, exterior condition of the home, lot size, home style, etc

• Internal characteristics: size and number of rooms, square footage, flow of the house, condition of kitchens and bathrooms, quality of construction and condition, quality of windows, whether or not it is fitted with modern air conditioning and finishes

• Comparables: the price that homes offering the same type of qualities have sold for recently

• Supply and demand: the number of buyers and sellers in the market. For instance, in Bermuda about 300 houses have sold per year, for the last couple of years

If we know inventory is at 500 houses on the market, these are not going to get as much money as if there were only 200 houses on the market.

• Location: How desirable is the neighbourhood? Is it safe? Near a grocery store? Are the schools good? Is the crime rate low? Is it a family neighbourhood where your children will make friends easily?

A home’s market value often is a good starting point for all kinds of things. Real estate agents use market value to help sellers come up with a fair asking price for their home.

No number is right or wrong; the ultimate deciding force is what price a buyer and seller are willing to shake hands on to close the deal.

Remember that in Bermuda all realtors are working in the same market place so the thing that is going to sell your home is how, when and where it is marketed for you.

Ask the realtor if you can see a marketing plan, that way you know if it is going to get the best exposure possible.

Is it going on multiple websites and social-media platforms? Is it being advertised overseas (not all Bermudians live in Bermuda) or are they just going to put an advertisement in the newspaper and hope readers tell their friends?

It makes a huge difference to your bottom line.

Remember too, that when a buyer is found. The chances are they will have to go to the bank to get some form of financing or leverage.

The bank will send out an appraiser to make sure that the buyers are not paying over market value for your home although, as in the case of a bidding war (which we do see in some pockets of the market), there are times when the buyer is willing to pay more because otherwise they will not get the house.

In this case, it is up to them to come up with the difference in cash.

So choose a realtor based on how good a job they are going to do marketing your home for you, because in the end the only number that matters is what a buyer and seller can agree on.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for nearly 30 years. Contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Follow Heather Realtor Bermuda on Facebook and @heatherrealtorbermuda on Instagram