A common mistake when selling a home has been and always will be pricing your home incorrectly. Even though 2017 will be a great year for home sellers, many sellers may sabotage their own home sale inadvertently. Yep, allowing your agent or pressuring your agent to attempt to sell at the wrong market price will put the nails in the coffin of your home sale.
How To Avoid the Common Mistake of Overpricing When Selling
The primary reason an otherwise desirable home does not sell is price. Homes that are well overpriced often fail to sell.
Because home buyers don’t make offers on them. Sellers often overlook how buyers will interpret their pricing. Here is how buyers actually think when a home is overpriced:
- “I won’t make an offer, because I don’t want to offend the seller.” The seller rationale of “I will negotiate the price down” only works if you receive offers.
- “Sellers will turn down low-ball offers.” I will say it again, in order to sell your home, you must receive an offer.
- “If a seller really wants to sell their home, they will lower the price.” Buyers don’t enjoy negotiating and would rather just avoid making an offer, especially when they know it will lead to lengthy negotiations.
- “I search for homes online and in my price range.” As a seller, you may want to price your home at $255,000, but most buyers look for properties online under $250,000, in that budget range. A home that isn’t seen online has little chance of showings or offers.
- “Listings that have been on the market for a long time must have a problem.” The best time to attract buyers is in the first two weeks of the listing. If you see little traffic during this time period, it is time to reevaluate your pricing.
How To Avoid Pricing Your Home Too High
As the seller of your property, you are personally invested in the outcome. You have the most to gain and the most to lose. As such, sellers have a hard time setting personal feelings aside when it comes to pricing a home. Keep these thoughts in mind while you and your agent price your home:
- A buyer doesn’t care how much equity, negative equity, or profit you want to make. They just want a fair price for the value.
- Make sure your price will fit with an appraisal of the property. If it doesn’t, any financed buyer will have a hard time with mortgage approval.
- Have a comparative market analysis (CMA) conducted on your property. Your Realtor should always provide you with a CMA before you accept them as your listing agent.
- Realize that the things that make your home different from others don’t always equate to a higher sale price. Most buyers could care less if your water heater is 60 gallons versus 40 gallons. That extra 20 gallons doesn’t mean the home is worth $1,000 more.
- Avoid the listing agent home value increase trap. When interviewing multiple listing agents to sell your property, look at more than their listing price. If these agents know they are in competition for your listing, they will often present your home at a higher value in order to gain the listing.
It doesn’t do you any good to have your home sit overpriced on the market. Some less professional agents use overpriced homes like this as advertising for other clients. Make sure your agent wants to sell your home just as much as you do.
As a Realtor, I get that you want to sell your home for as much as possible. I want to sell it for as much as possible, too. But like a broker with Cascade Sotheby’s International Realty said in a recent Times article, “It’s not like the old days where you put in a 10% buffer. People are savvier, and many agents won’t even show a house if it’s overpriced.” As a seller, it’s time to research professional Realtors in your area, hire them for the right reasons, and listen to their advice.
Have you ever sold a home that had been on the market for a long period of time because of overpricing? Share your experience in the comments.