Pricing Your Home to Sell "Do's & Don'ts"
By Mark & Annmarie Lenson
People Like Us…….People Trust Us
Put Our Experience On Your Side……..We Sold Almost 800 Homes
Sellers gamble when they play "The Price Is Right" with their own home.
One of the most important and difficult decisions homeowners must make when placing their property on the market is the determination of the correct asking price. If the price is too low, the property will probably sell quickly, but the seller may lose a substantial amount of money. (They typically do anyway. See For Sale By Owner article.) If the price is too high, the property will be on the market for a long time and ultimately may sell at a price under its current market value.
Realtors say their biggest problem is with homeowners who insist on listing their house for a price considerably above its realistic fair market value. If a home is priced correctly, there's a good chance they will sell it and get a dollar value of the property. On the other hand, you know what is said about greed. High-priced property is quickly identified by both brokers and prospective buyers as being overpriced.
Many sellers, anxious to net as many dollars as possible from their sale, insist on listing their home at a high price with the plan to lower the price if it doesn't sell quickly. That can be a counterproductive plan. The longer a property sits unsold, the more desperate the buyer will think the homeowner is, whether they are not. Buyers will also figure something is wrong with the house if it is on the market too long. Wouldn’t you wonder, too?
A property that has gained a reputation as being overpriced often has a stigma to overcome, which usually requires lowering the price to a figure below its market value. If the home was priced right at the outset, it could have sold faster and at a higher price than can be achieved by starting with a high asking price.
When a homeowner does not have documented research on the current value of homes in the area, it's almost impossible for a seller to come up with the right price. Owners are too emotionally involved with their home to know its true value to a prospective buyer. Or typically they will ask a neighbor what they think. Your neighbor (not to insult you) will cost you a high price for your home. Why not? That can only help them as well. This is also called the blind leading the blind.
A family's house has been their world. The homeowner's view of its current value is seen through rose-colored glasses and typically based upon how much money they need or want to get out of the property, not on what its actual value is. That view is generally not shared by prospective buyers.
Probably the best input for establishing a realistic asking price is to ask an experienced Realtor to give you a "competitive market analysis" on your house. This will include recent sales prices received for comparable homes in your neighborhood as well as a suggested listing price. Also, ask the Realtors for their advice on low-cost methods for upgrading the appeal of your house in the eyes of buyers, thus boosting its value.
Another method is to ask an appraiser for a FAIR MARKET VALUE appraisal. (If you had a refinancing appraisal done recently, you need to get a FAIR MARKET VALUE appraisal.) It can be well worth the $275-$350 fee.
What I need out of it method. One of the most common comments I hear is " I need to sell my house for $150,000 since I need $140,000 out of it. You see I have a second mortgage on the home, so I need more money out of it." Here there is no basis on what the market value is. These are the homeowners personal needs. This is of little or no value to the buyer.
Emotion. Don't price a home based upon emotions like your children took their first steps in the family room, or your beloved Tabby is buried under the oak tree, or it is a divorce situation. All
