Pricing your home to sell does not have to be a complex process when you have a plan of action and great information at your fingertips. After 21 years and over 2,200 homes sold, I can honestly say, the well informed, prepared seller will get the most money for his/her home in the shortest period of time.
Over the past 20 years, I have listened, watched and gone through thousands of real estate transactions and have noticed a commonality among sellers who failed at selling their home, lost money or had their home sit on the market for way too long. The failure was due to the fact their home was priced wrong.
Here are the 6 costliest mistakes you can make when pricing your home for sale.
Leaving Room to Negotiate
Pricing your home for sale should not take into consideration, bumping the price way up and knowing that you will come down if you get an offer. When a buyer or a buyer’s Realtor searches homes for sale, they normally search by price blocks. For instance, if I have a buyer that wants to spend $300,000 for a home, I will search homes priced between $250,000-$315,000. I won’t go way up in price thinking that the seller will come down.
If your list price is too high, you may miss a segment of buyers and squander your early days on the market. The first two weeks your home is on the market will be the busiest. That is when the agents that work your area will show your property. If your home is overpriced, they will only be there once.
Over Value Repairs
Preparing your home to sell means bringing it up to marketable conditions. Required repairs, like a new air conditioner, new carpet, or a new roof will not make the value of your home go up significantly. Although the repairs can be costly, these items are supposed to be in the house. If you live in south Florida like I do, air conditioning in July is not a luxury, it is expected. Your home will more than likely sell faster because of these repairs, but you should not expect to get 100% of your investment back.
Pricing Your Home Based Upon Your Monetary Need
Pricing your home to get it sold should be based upon facts, most importantly what similar properties recently sold for in your area. Many times home sellers base their price on what they need to get out of the home to move onto the next. There should be no correlation between your homes’ value and what you financially need. Having a net sheet prepared for you will help determine how much money you can anticipate. I always run several different offer scenarios so that sellers have the opportunity to look at their bottom line based upon different sales prices. Unpleasant surprises are not fun, especially when it comes to money.
Hiring the Wrong Agent
What does hiring the real estate agent have to do with pricing your home to get it sold? To answer in two words, a lot. Some agents will tell you what you want to hear just to get your listing. A good agent will show you the recent sold comparables as well as what has recently gone under contract (pending sale). Pending properties are like a snapshot of current market conditions. Pricing your home should take into consideration pending properties, days on market and similarities to your home. An open and honest discussion on pricing prepares you for offers. A good agent will show you not tell you about pricing your home. Don’t let your home become shelf old and sit on the market without any offers.
Not Being Objective
This is a big financial transaction for you and you probably have quite a bit of money at stake. It’s easy to let your emotions get the best of you. But take your seller hat off and look at your home how a buyer would see it. According to the National Association of Realtors, over 80% of buyers shop online before they even contact a Realtor. Buyers have seen your competition and have also looked at recent home sales. They have a good idea of what your home should sell for. If you price your home too high, they won’t even look at it. Don’t let your fear guide you into listing your home at a price the majority of buyers would not pay.
Refuse to Make Market Adjustments
One of the biggest mistakes a seller can make is keeping the initial price despite feedback.
The market is in constant flux. Like the stock market, what was hot yesterday may not be today. Listen to the feedback your agent is giving you and either consider changing the price or fixing the issue. Feedback from showings should mean something. Or, if you have had more than 10 showings on your home and nobody has made an offer you may want to consider reevaluating your list price. Sometimes no feedback Is worse.
Not being receptive to price changes may send a bad impression. Having a property on the market longer than the average sends a message that either there is something wrong with the house or you may be difficult to work with. Either one may not be the case but that is not what the real estate community is thinking.
Pricing your home to sell should take into consideration valuable repairs as well as your how your competition looks in regards to condition. Evaluating recently sold properties, similar homes just going under contract and working with a knowledgeable real estate agent can help you come up with the right price when selling your home.
Speculating the market may mean gambling with your home’s value. Interest rate changes or a large job loss in your area can have a negative impact on your home value. Chasing a declining market is a bad place to be. You can avoid it by pricing your home right the first time. Don’t make the mistakes many sellers have made and lose out on precious marketing time that may cost you thousands of dollars.