Is Your Home Priced to Sell or Priced to Sit?

One of the biggest mistakes you can make as a home-seller is overpricing your home. Whether you are hiring an agent or selling your home yourself (FSBO), pricing is many times the single most important factor whether a home appeals to the current market’s buyers, or the home sits on the market for six, nine, or twelve months. When it comes down to it, this can be one of the most simple tasks when positioning a property on the market. Too often, home-sellers price their home with their heart rather than their head. The simplest way to set a price for a home is to look at the most recent comparable sales. This probably sounds like a no-brainer, right?

Recently I spoke with a seller who is selling his own home. His reasoning for that I won’t get into here but, his approach to pricing his home was based on the current active inventory, not what has closed and sold. This was interesting to me. His point to me was, “My home is the second lowest priced home with similar size and details, so my price is just fine.”

The problem with this method is exactly what prompted this blog post. Many sellers and/or their agents overprice their home. So what I told him was, you are pricing your home against the “wish list” of other sellers, and not what buyers have already said they are willing to pay for a similar property. He didn’t agree and that is just fine.

One method to avoid the perils of sitting on the market is a pre-listing appraisal. As long as you have an appraiser that is familiar with your city, town, or even your neighborhood you will be just fine. A true market value ahead of time will give you the knowledge and the power you need to get the highest possible price for your home. Remember, if your home is priced too high and even if you find a buyer willing to pay over market value, your home still needs to appraise for that price if the buyer is getting a loan. If they are paying cash or willing to come to the table to satisfy the difference, no problem. But let’s face it. The majority of buyers in today’s market are looking for a deal. You can use this pre-listing appraisal in your favor too. If you have a buyer that is willing to pay a reasonable price for your home, you can use this appraisal to show them what the property is really worth. Most of the time, a buyer will feel more confident to offer more.

Other things you can do...