Sellers: Avoid These Pricing Mistakes
30 Mar2010
Filed Under Selling · Tagged: Housing Market, Pricing · Print This Article
In this tough market, pricing is KEY. I will work tirelessly to price your house appropriately, but it helps when sellers understand the dos and don’ts. Frontdoor.com outlined six major selling mistakes and tips on how to avoid them. We’ll elaborate on them here.
Mistake #1: Forgoing Research.
Not basing a listing price on careful research could leave your home languishing on the market. And it’s more complicated than just looking at what a house down the street is listed for, or making something up that sounds appropriate to you.
What I will do is a comparative market analysis, which is a report that looks at similar properties in your area that are similar to yours, and what price they sold for.
Mistake #2: Hiring the agent who offers the highest list price for your home.
If you interview several agents and one agent gives you a significantly higher price, be wary! He or she may be trying to “buy” your business by suggesting he/she can get more for your house than anyone else. If it sounds too good to be true, it probably is, and it will cost you time and money to When you price your home too high, it will sit on the market and end up having to slash the price to move the property.
Mistake #3: Getting emotionally involved.
This part is tough. Homeowners are often attached to their homes. They think of the money, time and memories that are part of the house. Sellers want to wrap these memories and meanings into the sales price, but what a seller thinks a home is worth is irrelevant to the appropriate sales price.
Just remember this is a business transaction. I’m here to help you price the home objectively, and will be encouraging you to set your sentimental feelings aside when settling on a price. Focus on statistics and facts, and don’t be offended by low offers from potential buyers.
Mistake #4: Pricing too high from the start.
The first 5 days are crucial to your home sale. When your listing is fresh it will attract the most buyers — people who are ready to buy and checking for new listings often. If you enter the market too high, buyers will click past you because you’re out of their price range. Thinking you’ll just try it high and reduce it later is not a great idea. The new reduced price might look good, but they’ll be wondering why it’s been on the market so long and why it needed a reduction. They might think something is wrong with your home.
Pricing it right first gets attention from the buyers most suited to your home.
Mistake #5: Overpricing because you have “time.”
What if you aren’t in a hurry? Just price it high because you have extra time, why not? Not a great plan. In a lot of markets prices could still be falling at the time you list. Waiting it out could cause you to lose money.
Don’t take the chance hoping to make more with an overpriced home. Your best bet is still to price it right in the first place, or you might miss your chance to get the best offer.
Mistake #6: If sellers fall behind a market with falling home values, they can end up chasing the market down, because home values are always falling faster than their price reductions.
Mistake #6: Chasing the market.
If you price too high at the get-go, you might find yourself trying to lower it incrementally to catch up to the market.
If prices are dropping anyway and you start too high, your multiple reductions will not only look bad to potential buyers, but you may never catch up to the market and you’ll remain consistently too high.
A price reduction is never out of the question, and I’ve certainly had to do it before! Selling your home is always better than not selling it. But we’d never want to price purposely high and plan for a reduction — it’s not the best formula for a sale.
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