3 Big Pricing Mistakes & How to Avoid them
Regardless of what kind of home you have or what your reasons are for selling, everyone has the same goal when they list their home for sale: to sell fast and for top dollar. Pricing a home incorrectly is one of the biggest roadblocks to achieving this goal. Here are three of the biggest mistakes people make that can jeopardize the realization of this goal and how to avoid them.
Mistake #1 – Forgetting that your home is now a product that’s for sale
Every home tells a story of the people who live there. Whether your home has that one wall where you marked off the height of your children as they grew or the deck you built with your dad, it feels like there are memories in the walls. So, when it comes time to sell, it’s no wonder that putting a price on something you have poured your blood, sweat, and tears into over the years is an emotional process. It’s for this reason that many sellers view the pricing of their home through the eyes of sentimental value and not market value. The solution to this problem is embracing this one idea: the minute your home gets listed on the market, it becomes a product which is for sale and it’s the market that dictates the price. For many sellers, this feels like an unnatural way to think of their home, but this change in thinking is an essential first step. It’s like the difference between decorating and staging. You decorate a home you live in but you stage a home you’re selling, and the end result of each looks very different. Similarly, your home is worth something to you, but what the market is willing to pay for it may not match your feelings. This subtle but critical shift in the way you look at your home will result in a home that is properly priced (and subsequently properly staged and marketed). This will, in turn, result in a home that sells fast and for top dollar.
TIP
Do your research in picking a Realtor®. The more work you’ve done ahead of time, the easier it will be to entrust the selling of your home as a product to professionals that will help you fetch the best price possible. Click here to find out how hiring the right Realtor® can save you thousands.
Mistake #2 – Ignoring current market conditions
When a Realtor® comes into your home to do a home evaluation, he or she will bring in research that shows what similar homes are worth in your area and they’ve sold for. That’s a good start, but it’s not enough. At the beginning of 2017, the market in Simcoe County was booming and Realtors® were regularly dealing with low inventory, competing offers, bully offers, and homes that sold for well above asking. Within a matter of months, things had cooled off considerably and inventory levels were much higher. The market changes. Inventory levels change, as do regulations and interest rates, and all of these things have an impact on what you can expect your home will sell for and how fast. It’s essential to have the historical data on hand, but it’s equally important to have a firm grasp on what the market is like right now. Nine months ago, your neighbour may have listed for more than what your Realtor® is recommending to you today and sold for over asking, but market conditions right now may be very different.
TIP
When it comes to pricing your home, it is a Realtor’s® job to know the strategies that work in the current market. Be prepared to discuss price regularly; the factors that affect a sale aren’t always anticipated and can change rapidly. Being open and prepared to face changing conditions and new information in order to get the best price for your home.
Mistake #3 – Rolling the dice with your home price
Let’s just list the house $50,000 over what you’re recommending and we’ll see what happens. We hear this a lot. Sometimes this recommendation comes about because the sellers aren’t in a rush and so they don’t mind playing the waiting game, but most often sellers feel this strategy will net them more in the end. The problem is that the facts don’t bear this out. Listings that are priced too high tend to sit on the market without viable offers. The longer they sit, the lower their perceived value becomes. If you’re quick to make a correction and don’t wait too long to reduce your asking price, you can help overcome this issue; however, if you wait too long, often the damage has been done and stigma has been attached to your property that can result in a lower sale price. Your goal is to get the highest possible amount from the sale of your home, but overpricing is a gamble that usually doesn’t pay off.
TIP
Buyers that are looking for homes are typically looking up to a certain price point. We call those “glass ceilings.” If you list above a glass ceiling, you may be missing out on buyers only looking up to a certain price point. Make a big splash by pricing your home appropriately right from the start. You will get the attention of serious buyers right out of the gate and if you’ve got the right Realtor®, they will make sure to negotiate the best sale price possible.
Mark Faris, CEO & Broker
Ready to take the next step? Request a Free Home Evaluation