When you are preparing to sell your home, one aspect is likely foremost in your mind: money. Too often we see sellers equate a high asking price with with high net proceeds. That often backfires!
Setting the asking price accurately can mean the difference between getting an offer quickly and having a house languish for months, drawing little interest.
With that in mind, it’s important that you block out a lot of the noise that often surrounds the intricate art and science of pricing. There are plenty of myths that may cause sellers to lose sleep at night as they attempt to separate fact from fiction.
The following are statements that can stand in the way of a successful sale.
1. ‘If we keep waiting, a better offer will come along!’
When sellers receive an offer from the first showing, they may be skeptical or hesitant to accept it, wondering if other prospective buyers would be inclined to pay more. Thoughts of potential bidding wars could cause sellers to want to wait and see who else falls for their place. But, remember the old adage, “A bird in the hand is worth two in the bush?” There’s no guarantee other would-be buyers are waiting around the corner. If the offer is a fair one, entertain it and count your blessings. After all, your goal is to sell your home, right?
2. ‘Getting an offer right away, means the agent priced it too low!’
If you receive an offer early in the process, as excited as you might be, you’ll likely wonder, “Should we have asked for more money? Did our agent price it too cheaply?” While it’s natural to be skeptical (and even a little greedy), receiving an offer on the early end of the spectrum most likely means your home was priced accurately and attractively. If you trust your agent, you know he or she didn’t pick a number out of the sky, but rather based it on extensive market research. Be glad your sale is moving in the right direction!
3. ‘We should price it so there’s room to negotiate!’
Let’s be honest: Most sellers would love to get top dollar for their homes. But overpricing it with the intention of being willing to accept a lower offer may just leave you empty handed in the long run. Plus, if you have to drop your ask multiple times, buyers may begin to wonder what’s wrong with the place — other than the price, that is. To sell your home for the most money, price it right the first time!
4. ‘That’s not what my Zestimate says it’s worth!’
Have you ever noticed how other homeowners are eager to believe Zestimates or other automated valuation models when that price exceeds their expectations? Yet, when the opposite happens, they assume they’re getting outdated or erroneous information? The point is, aggregated values generated online are usually inaccurate. If you’ve reviewed comps with your agent, you should have a good understanding of your home’s current market value.
5. ‘We can add all renovation costs to the asking price!’
You surely love the improvements and renovations you’ve made and want to add in those costs to the asking price. But remember, not every change is going to land a huge return on investment. If you’re curious about what you can expect on those fixes, check out Remodeling Magazine‘s annual ‘Cost Versus Value’ report to get an idea of which upgrades yield the biggest bang for your buck. Also, as you’re making changes, bear in mind that the infinity pool you view as an asset may be a liability to a buyer that doesn’t want a pool.
Before you invest in expensive renovations, give us a call and we can advise you on the potential return on your investment
6. ‘My Realtor® overpriced my house to make a larger commission.’
We agents are paid with a percentage of the selling price of the home. However, our business is built on our reputations and our integrity. It is in our interest to make sure that we are serving your interests. If you feel that isn’t the case with your agent, you are likely working with the wrong agent.
7. ‘Reducing the price is a sign of weakness!’
While sellers aren’t always eager to drop the listing price, if time is passing and there’s been little interest, it is probably time to consider lowering the ask. Remember, time is money. While you’re waiting for someone to meet your price, you’re still paying the mortgage, taxes, utilities, and insurance etc.
It’s important to be sure you are pricing to attract the largest group of potential buyers – not the one unicorn buyer who might be willing to pay above market price. If you aren’t getting the desired level of activity, the market is sending you a message.