If your property isn’t selling while others in your neighborhood are moving like hot cakes, it might be time to take a good look at the price. Better yet, give serious thought to setting a realistic price before you put your home on the market. Overpricing homes for sale is one of the biggest mistakes a homeowner can make when selling, and the consequences are often difficult to overcome.
For example, buyers may not even consider your home if they think it’s out of their price range; prospective buyers may think there’s something wrong with your home since it has remained unsold for so long; your home may help sell other similar homes that are priced lower; and there’s a good chance your home will probably sell for a lower price than it’s worth.
Let’s look at some of the mistakes consumers make when it comes to (over) pricing a home for sale:
Selling with the idea of making lots of money to buy the next home. Some owners expect their present home to bring them the money they need to buy a more expensive home. While the proceeds from the sale of a current home can be an important part of the downpayment for the next home purchase, the two transactions are separate when it comes to determining the worth of the properties. After all, how much profit a seller needs to clear on a home sale has nothing to do with how much the home is worth. The home is only worth what a buyer is willing to pay.
If a house isn’t priced in line with what other homes in the neighborhood are selling for, it likely won’t sell. Ask your Realtor what a fair price is for your home; he or she is an expert in your neighborhood and can give you a good estimate.
Not relying on facts and market analysis. Other owners price a home too high because they have not had their property evaluated by a professional. Relying on limited or outdated information or remembering how much a friend sold his house for, they put a price on their property that does not compete with other available, similar properties. An owner who doesn’t know or who ignores the market facts often ends up getting less than fair value. Again, your Realtor is a valuable resource; most will supply you an analysis of what properties are selling for in your area. You may want to interview two or three Realtors before choosing which one you want to represent you in selling your home.
Other ways to determine how much your home is really worth include hiring an appraiser, picking up fliers at neighboring houses, scanning newspaper ads, surfing the Internet, and going to open houses. Whenever possible, find out the final sales price, not just the asking price.
Selling quickly. How quickly you need to sell can also affect the sales price. If you’ve landed a great new job in another state and must sell very quickly, pricing your home a little lower than other homes in your area could be the ticket to a quick sale. Share this information with your Realtor – and no one else.
Upgrades may not be worth what you think. The amount of money you put into upgrades and repairs over the years does not have an exact correlation to the price of the house. In other words, if you spent $4,000 on a hot tub six years ago and paid $6,000 for a new roof last year, your house is not necessarily worth $10,000 more than the nearby house with no hot tub and a 12-year-old roof. More importantly, it’s the current market, the condition of the house, the location of the house, and how it compares in total to other nearby homes when it comes to determining a fair price.
Not considering every scenario. Overpricing your home may create other problems as well. If your home sits on the market for many months, you may have carrying costs, especially if you move to your new home before you sell the old one. Those carrying costs may wipe out any additional profit you realize from a higher price. And even if a buyer is willing to pay the higher price you’re asking for, he may have trouble with the financing if the property appraisal comes in lower than the contracted sales price.
Pricing your home to sell means setting your own ideas aside and seriously considering the opinions of experts like your Realtor or appraiser. You’ll end up getting the best price possible – and your house will sell much quicker.
For more information, visit TexasRealEstate.com. For professional services, contact RE/MAX Genesis at 830-833-2000 or firstname.lastname@example.org.