Common mistakes when pricing a home to sell

Pricing your home to sell? Don’t make these mistakes!

The following are some mistakes by eager vendors when selling their properties.

“How do I know my home is priced correctly?”

Pricing your home correctly is critical to getting the most return on the sale of your home.  How do you know your home is priced correctly? The first thing you need to do is understand how the markets works and what type of market you are selling in.

  • Is the inventory low?
  • Are the Mortgage rates low and going up?
  • What are other homes selling for? Have a good understanding what your competition is.
  • What have other homes SOLD for recently (in last few months)
  • Do the comps you are looking at include bank owned properties with lower price tags?
 
“But Homes.co.nz says my home is worth…”
The first thing homeowners do is look at estimates provided by Homes.co.nz. This can give you a general idea but their numbers are not accurate.  Don’t trust these numbers to be true. Prices can differ from one street to the next and homes.co.nz will have no idea that this is the case.

Data collected by Homes.co.nz such as number of bedrooms and bathrooms, lot size and square footage may not be accurate. Homes one street away with a highway dividing them makes a huge difference in the pricing of a home. Homes.co.nz does not take this into account.

You should merely use the prices from their websites as a broad guideline, and contact a local realtor to advise you.

Homes.co.nz has provided us with some useful information but their property values shouldn't be your indication of market value.  A local agent is your best bet for an accurate listing price.
 
“Let’s just wait for an unrepresented buyer to come along and overpay!”
Once you have a good understanding of the current market many homeowners will list it high and just wait longer to see if they can get the higher price. They are counting on a first time home buyer who may not have agent representation come along and overpay.  Even if that did happen the home is not likely to appraise and the buyers may not be able obtain a mortgage.

“Let’s go high so we have some room to negotiate”
Don’t price your home with negotiation room.  Price it at fair market value and you may get multiple offers and get over the asking price. Waiting for that one special buyer to come along is a dream and can cost you money in the long run.

“Let’s throw more money at marketing to sell our home”
Many people believe that more or different marketing will bring more buyers. If your home is overpriced this will not be the case.  Pricing a home  [Show me the money!] properly is a skill and it is the most important piece of the puzzle in getting your home sold.   NO amount of marketing that the agent does will matter if the house is not priced correctly. You want to attract ready, willing and pre-qualified buyers for your home right from the get-go.

“It sold so fast! Did I under-price my home?” 
If a home sells quickly, there is a perception that the house was priced too low. This is simply not true. If a home is priced too low then there will be multiple offers and you will most likely get more than the list price.  The market will adjust the price.

“How do I negotiate my home sale if I get a low-ball offer?”
Getting a low offer is frustrating and common when selling. Just be ready for it and try to leave the emotion out of it. You will think of all the wonderful improvements you have made and the money you have invested into making this home top notch. Try not to take it to heart and let your agent guide you through this transaction and negotiate all offers on your behalf.

Home selling statistics show that…
If in the first two weeks on the market you get zero showings then it is safe to assume it is highly overpriced. The buyer’s real estate agent will have advised the buyer of the fair market value. Even if the buyers want to put in a high offer tit may not appraise and they may not be able to obtain a mortgage.  Very few buyers  are unrepresented, it does not cost them anything to hire an agent.
If you get several showings in the first few weeks but no offers then you may assume the home is slightly overpriced and the price should be adjusted.

In an active market with a well-priced home you may find yourself in a multiple offer situation and get over asking price.

When you price a home too high you will eventually have to lower the price enough to get a new pool of buyers. The others will have gone off and bought something else while you were waiting for that “one buyer”. 

Before putting your home on the market make sure you prepare your home for sale.

Bottom line when pricing your home to sell …
Don’t sabotage the sale of your home! Pricing your home appropriately from the beginning is critical to getting it sold quickly and at the best price. Overpricing your home may mean that your home will sit on the market for months and even years giving buyers the perception that there is something wrong with it.

The longer a home stays on the market, the more the price will drop from the original price. Don’t chase the market.

An agent will analyze the sales prices of comparable homes in your neighborhood and advise you accordingly.

Your best bet to get the best sale result for your house is to take your agent's advice on price, based on recent sales in the area, buyer feedback and the current market.

Ammended from http://www.eileenandersonrealtor.com