Most people are not prepared for the roller coaster ride that selling their home will bring. Pricing your property too low risks leaving money on the table and pricing the property too high could result in fewer showings and diminished offers. Let’s consider the following pitfalls for pricing your home saving you time and money when it comes to selling your next property.
1. The Feels
There must be detachment from the ‘feels’ of your home, this is now your real estate property – not your home. The goal is to take your home to market, and make the most of your real estate investment. Overpricing a home is the number one reason a home does not sell. The objective is to identify the maximum price for the property that the market will bear. Look at the comparable market data, just as the Buyer does. Remove all emotion from the decision.
2. Tell Me What I Want to Hear
Be mindful of the unscrupulous agent, the one willing to tell you what you want to hear. There are agents out there who will encourage your high expectations in order to get your listing, and then tell you to reduce the price when the home does not sell in a month. ‘Auctioning’ off your listing to the agent who is willing to list at the highest price, will likely result in YOU paying the high price when the property does not sell.
3. Smart Buyers and Great Realtors
A great realtor will stay away from overpriced listings, but frankly, the informed buyer will also know when a home is overpriced. They intensely scrutinize the market and all of the available inventory during a window of time that indeed turns them into experts! They know better than anyone else what your home is worth; and they are not going to pay more than the market will support.
4. Nobody Likes Stale
In real estate, time is your enemy. The worst thing you can tell yourself is that you have time to wait until a good offer comes in. in the vast majority of cases, your first offer is your best offer. And, if that offer doesn’t come within the first few weeks of listing, you’ve missed your mark on price and need to adjust rapidly. One of the first questions a Buyer’s agent asks about a property is “How long has this property been on market? The odds are stacked against you for a sale when the home is perceived as ‘stale’, it casts doubt on the reasons for lingering on the market. There’s an ideal time frame for each neighborhood within which to sell a home; usually within the first 45 days on market.
5. Improvements? Not really.
Your property’s worth is not dictated by how much you spent on improvements. Tastes vary and styles change, there are many things that cost good money, but inevitably do not factor into a higher price. The market dictates the value, not your assessment of what you should get out of the property.
6. Market Adjustment
if the market goes south on you and you started your price too high, you are going to have to drop it considerably lower than you would have had you set the price appropriately in the first place.
7. Appraisal Issues
If you are lucky enough to attract a buyer willing to pay your high price, the deal is not over. If this buyer requires a loan in order to close the property, you must still convince the appraiser of this value. The Bank will only loan against the appraised value of the property. If the appraisal comes in lower than the contract price, in most cases, there will be another round of negotiation as few buyers are willing to pay a price higher than what a qualified appraiser deems the value.
If accurately priced, your property will sell in the shortest time, while still obtaining the highest price possible. Ultimately, netting you the best financial return on your real estate investment! Buyers only care that they are paying fair market value!
Give me a call to review your property! Marie Callaway, Broker/Owner (303) 437-6999