Risks of Pricing Your Home Too High
Determining the price of your home is no easy feat. It’s one of the largest sales one may have, so it can be incredibly difficult to determine how much your prized possession is worth. So how do you determine the perfect price to sell your home?
When you start the process of selling you have to shift your perception. You don’t determine how much your home will sell for, the market does.
First things first, do not price your home too high. There is nothing worse than having a property sit for months on end. Especially if you are in the process of purchasing another property. In this market, homes are receiving multiple offers day one, IF PRICED PROPERLY. Often times when you start the price too high, you sale the property for significantly lower than you could if you price the home appropriately. Below find a few tips to avoid when pricing your home:
Not Listening to Your Agent: Many sellers have an idea of what they’d like to walk away with. A real estate agent is a subject matter expert. They have access to Listing Services that provide insight into what homes have sold for, terms of the sale, and much more. Listen to their advice. It serves them no purpose to sell your home for less. They are solely commission based, so if they recommend selling it for less, they take a hit on their pay as well, which means they really believe based on information available that the home will sell for that value.
Overzealous Agent: Many agents are inexperienced or eager to earn your business, so they’ll over price your home to win you over. Not a good idea because it will come back to bite you. If it feels too good to be true, IT IS!
Zillow Zestimates: These do not account for other factors with determining the price. It can be too low or too high. Avoid following these numbers with working a pricing strategy.
Mortgage Payments: The more time you let go by, the more mortgage payments you have to make. It is best to price your home as close to market demand as possible so you can avoid losing even more money.
Negative Perception: The longer the property sits the more negative the perception. Often, buyers and their agents assume there is something wrong with the property and may avoid showing it all together. Your home could sit for a longer period if you price it too high. You may have to go through multiple price reductions before your actual buyer’s audience gets to actually see your home in their search and by then buyers may make offers even lower than what you originally could have sold it for due to the lenghty time your home was listed.
Appraisal Issues: Sometimes you’ll get the price you want or very close to it. However, the home may not appraise, and since most clients are financing, they need an appraisal to get funding from the bank.
Find a good agent, listen to the market, price right from the beginning. Besides, its a seller’s market.