1. Listing it at a price your neighbors told you they sold theirs for. When deciding how to price your home, you need to do more market research than asking your neighbor. While you may live on the same street, you may not be comparing apples to apples. Theirs might be newer or have been recently updated. Yours might have a bigger yard. Theirs might have a downstairs master while yours is on the second floor.
Timing is another factor to consider. Maybe your houses are pretty similar but they sold theirs in a seller’s market and now there is a backlog of inventory giving buyers the upper hand.
2. Listing your house at a higher price so you have room to negotiate. This is one of those real estate myths that just can’t be put to rest but if you rely on it, it can work against you. Here’s how.
You could be eliminating potential buyers. Buyers shop with a certain budget in mind, many times thanks to a pre-loan approval. If you’ve overpriced your home and out of their budget, they may not even look at it, when in fact, they could have afforded it if you’d listed it at its true value.
You could be lengthening the time your house stays on the market. If your house is overpriced, it’s very likely it will take longer to sell. Days on market is one of the factors that influences a home’s perceived value so the longer it sits there, the more “negotiating room” the buyer believes he or she has. So that “wriggle room” you left room for just got a lot bigger.
3. Listing your house without a comparative market analysis. Remember what I said about comparing apples to apples? That’s what a comparative market analysis done through a professional Realtor does. It takes your house’s square footage, condition, location, age, etc. and compares it to similar homes that have sold. You should start your listing decision with this data-backed information in hand and only list with a Realtor who insists on doing one.
4. Listing your house at a higher price because you’re in no hurry to sell. If you’re not in a hurry to sell, then it’s better to wait before putting your home on the market. This luxury of time that you feel you have can be eaten up by that “days on market” factor I mentioned earlier. An overpriced home will sit on the market longer because (a) experienced Realtors will advise their clients that your home is overpriced (b) potential buyers won’t even look at your home because they think it is out of their price range. Waiting until you’re ready to move on and then list your house at its market value.
5. Listing your house with the real estate agent who comes in with the highest listing price. Sellers often go with what they want to hear, only to pay for it later. Every Realtor has his or her own approach to getting listings and one of those is to essentially “buy” the listing by offering the highest price. But if you’ve interviewed several real estate agents and they’ve all come in with lower values, consider what I’ve said earlier about the perils of overpricing your home.
6. Listing your home before you’ve taken care of repairs. Some sellers prefer to ignore certain home repairs to save money when putting their home on the market. Others, once again, may hike up their asking price anticipating that they will have to chip in later for repairs. This is another decision that can come back to haunt you. Home inspections which are required before a sale goes through will turn up your “dirty laundry” (or loose stair railings, leaky roof or basement moisture) and could end up costing you more money down the road with credits to the buyer and/or losing a buyer altogether. Better to address the problems head-on when you are in charge of who’s doing the repairs and for how much. Then price your house accordingly, factoring those costs in.
7. Listing your house for less to account for the “condition” it’s in. Sometimes this strategy works and is necessary but in my experience, buyers have a hard time overlooking things. If at all possible, try to present your house in the best condition possible–clean, uncluttered and updated as much as possible. If you’re not in a position to do that, then be sure your listing price is discounted enough to enable buyers to see the potential and be willing to realize it. I can speak to this personally. Recently I tried selling a home I owned in an “as-is” condition with a price that reflected that, assuming the buyers would either tear it down or remodel. After a few months with no offers coming it, I took it off the market and fixed it up–painted, updated the kitchen, redid the hardwood floors, new carpets. When I put it back on the market at a much higher price I was able to recoup my updating costs and increase my profit considerably over what I would have made the first time around.
If you’re thinking of selling your home, I’d love to put my 25 plus years’ experience as a Realtor in Lake Oswego to work for you. Give me a call at 503.939.9801 and/or check out my website. Let’s meet and start our conversation with a comparative market analysis. Hope to talk with you soon.