How to Sell High: Avoid these Three Mistakes When Selling Your Home
Pricing Strategy Starts with Good Information
Before you can begin to know what your home is worth, you should do some research, bearing in mind the following:
An analysis of what homes have recently sold for in your neighborhood is NOT enough to help you properly price your home.
A quick scan up and down the street at the prices of homes that have recently sold will give you a starting point. However, this is not nearly enough for you to base your entire pricing strategy on. It is important for you to understand how buyers look for a home.
Think about how you conducted your house hunting search to nd the home you are now thinking of selling. You most likely did not con ne your search to a single neighborhood, but perhaps different neighborhoods or towns in order to nd a home that best matched your needs and desires.
There are 4 common strategies that most sellers use to price their homes. It is unwise to assume that a higher asking price will net you a higher selling price. In fact, often this equation works in reverse if you’re not paying attention to what the market is telling you. Bear this research in mind when you set your asking price.
1. Clearly Overpriced:
Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for your listing, an easy way to win the battle is to overin ate the value of your home. This is done far too often, with many homes that are priced 10-20% over their true market value.
This is not in your best interest, because in most cases the market won’t be fooled. As a result, your home could languish on the market for months, leaving you with a couple of important drawbacks:
your home is likely to be labeled as a “troubled” house by other agents, leading to a lower than fair market price when an o er is nally made you have been greatly inconvenienced with having to constantly have your home in “showing” condition . . . for nothing. These homes often expire o the market, forcing you to go through the listing process all over again.
2. Somewhat Overpriced:
About 3/4 of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than you want. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (afterall, there’s a lot of emotion caught up in this issue), OR you’ve left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received
3. Priced Correctly at Market Value:
Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These competitively priced homes usually sell within a reasonable time-frame and very close to the asking price.
4. Priced Below the Fair Market Value:
Some sellers are motivated by a quick sale. These homes attract multiple o ers and sell fast – usually in a few days – at, or above, the asking price. Be cautious that the agent suggesting this method is doing so with your best interest in mind.
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