When preparing to put their El Dorado Hills property on the market, one aspect is usually foremost in our clients’ minds: money. Setting the asking price properly can mean the difference between getting an offer quickly and having your house languish for months, drawing little interest.
With that in mind, it’s important that you learn to 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 our 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 you receive an offer from the first showing, you 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 you to want to wait and see who else falls in love with your home. 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.
It is very common that the first offer is the best offer, often coming from a buyer that has seen all the homes currently on the market and who has been waiting for exactly your home.
2. ‘Getting an offer right away, means the agent priced it too low!’
When you receive an offer early in the process, as excited as you might be, many clients can’t help but wonder, “Should we have asked for more money? Did you 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 us, you know we didn’t pick a number out of the sky, but rather based it on extensive market research. So, be glad your sale is moving in the right direction. Again, in this market we often see anxious buyers who have missed out on previous homes and are making good offers early to avoid having that happen again.
3. ‘We should price it so there’s room to negotiate!’
Let’s be honest: Most of our would love to get top dollar for their homes – who wouldn’t? But overpricing your home with the intention of being willing to accept a lower offer may just leave you empty handed in the long run. Buyers know the value of homes an often will skip making a lowball offer. Then, when you have to drop your asking price multiple times, buyers often begin to wonder what’s wrong with the place — other than the price, that is.
4. ‘That’s not what my Zestimate says it’s worth!’
Have you ever noticed how homeowners are eager to believe Zestimates or other automated valuation models when that price exceeds their expectations? Yet, when the opposite happens, they assume it’s outdated or erroneous information? The point we’re making is, these numbers can be inaccurate, so again, trust us over the Internet. Enough said.
5. ‘We can add all renovation costs to the asking price!’
You may adore 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 just seem like a huge liability to a buyer. The market doesn’t care how much you spent on your renovations, the market only cares what your home is worth at the current point in time.
6. ‘My Realtor® overpriced my house to make a larger commission.’
Yes, we agents are paid a percentage of the selling price of the home. However, if we don’t sell your home, we don’t make a penny. Our job is to sell your home as quickly as possible for the best possible price. We understand what buyers are looking for, what homes are your homes’ competition, and the neighborhood sales trends. More often than not, we are suggesting a lower asking price rather than the higher one our clients would prefer.
7. ‘Reducing the price is a sign of weakness!’
While no homeowner is eager to drop the listing price, if time is passing and there’s been little interest, it could be time to consider lowering the ask. If your home is lingering on the market, the message being sent is that buyers aren’t seeing the value in your home at its current price. Plus, time is money – real money. While you’re waiting for someone to meet your price, you’re still paying the mortgage, taxes, utilities, and insurance etc. Plus, sometimes, lowering the price can put your home in front of a group of new buyers, which could generate a lot more interest and, ultimately, get the price back up closer to where it was in the first place.