Pricing Your Home Incorrectly
I'm starting a new series on the blog about avoiding real estate mistakes. Buying or selling a home can be sort of a mystery to people - especially if you've never done it before. That's why you need a trusted advisor to help you through the process. Read on for my tips about making one big real estate mistake - pricing your home incorrectly.
Every seller wants to realize as much money as possible when selling their home. The natural inclination is to price the home high, thinking you can always come down in the future. But a listing price that is too high frequently nets the seller LESS money than an original price at market value. Why is this? Because people looking for homes in your price range will reject your home in favor of other homes in a reasonable price range.
And heres the real clincher: Agents who would readily bring buyers through your home will automatically cross it off their showing schedule because its priced too high. They're only motivated to show homes with the highest probability of selling. Agents simply will not show overpriced homes because they work by commission. They know market values because its their job to know. And they don't want to waste their time.
So you price your home high, thinking you can come down. Problem is the agent and buyer community don't look at it that way. They see it as an overpriced home. After a few months go by, eight or 10 open houses, signs, agent tours and not a nibble. So you decide to lower your price again. But its too late and your home has already been branded by the agent community. So you reduce your home a little more. And little happens. Finally, in order to attract attention back to your home, you've reduced your home price more than you ever thought you would, and you're now netting much less than if you had priced it correctly in the beginning.
And think about this: The money you lost is not just the lower sales price, but all the extra interest you paid on your mortgage and all the extra property taxes and other carrying costs that accrue while your home is waiting to sell. I've seen it happen time and again!
Overpricing almost always increases time to sell, and adds to your carrying costs. That's why I provide a complete, no obligation evaluation of your home. Want to know what your home's really worth in this market? Give me a call today - I'd love to talk with you.