Everyone wants top dollar when selling their home and that is fine, if your home is in immaculate condition, completely up to date inside and out, your landscaping is manicured complimenting fabulous curb appeal of the home, in the ideal location within the development and the market is climbing. Wonderful, fantastic! Not to be cold or harsh however does that describe your home and the current market? Do you acknowledge and take into consideration both the state of your house and the direction the market moving? Selling a home is a dance. Are you leading or following in the market?
We have all been there. Being realistic can be difficult and simply inconvenient. Remember when you were house hunting? Did you immediately feel that some homes were overpriced the moment you pulled up or stepped inside? You may have asked the agent giving you the tour. How did the seller come up with this price? And followed up asking if there was a mason jar in the yard filled with $1,000 bills.
Here are 7 myths regarding home pricing that many sellers allow, yes choose to believe despite the facts and time tested counsel. The pool of buyers known as the market, will rarely be fooled.
- It is better to build in some cushion, price toward the high side so I have room to negotiate. After all, the buyer is free to write an offer.
- If you price too high, the market may never ask to see your home in the first place. You won’t get offers to negotiate if they don’t see the value.
- Some buyers and maybe their agent are too timid to make a reasonable offer thinking the seller is already unrealistic.
- Sellers unconsciously slip into greedy thinking. Whether an offer that is reflective of real value or discussion of a price reduction, sellers often feel they are “giving up” money. Really? Unless that is the true amount invested into the house, you never had that money so how can you be “losing” it?
- I’m leaving money on the table if priced for the market. Why do you think that?
- In reality the opposite is true. Pricing right in an active market can result in multiple offers. Would you like a bidding war for your home?
- That does not happen when a home is overpriced from the beginning.
- Proper pricing can significantly shorten the time on market meaning you can relax a bit since you won’t have to live in a ready to show state 24/7 for weeks and months.
- When buyers feel a home is priced right, they will be likely be far less particular about little things. Especially in a multiple offer scenario.
- Remember back to when you wore buyer shoes? Were there houses that lingered on the market? What were your thoughts about those properties? Nearly every buyer I have worked with will say. There must be something wrong with it! If I could get them to tour the house, they would scrutinize it more searching for that physical fault when in reality the only problem was the list price.
- Time improves wine. Not true when it comes to a house lingering on the market. It loses flavor and gets less attention each passing day.
- The carrying charges of maintenance, insurance, utilities and the mortgage continue eating at your wallet. So how will you come out ahead with that route?
- Your bottom dollar! Today you have one opinion of your homes worth, tomorrow there is an unexpected event in your life and suddenly you have a far different position.
- When faced with an offer that is lower than your expectations, put your pride aside. Don’t become indignant, digging in your heels. Good business people keep their emotions at bay so their thinking is clear and fact based.
- Work with the offer. You have no idea where negotiations could lead or if a better offer may come along at all.
- Why is the offer so low? Sellers commonly think that there is an unwritten rule that offers must come in very near the asking price.
- Why must a buyer be so generous up front? Even in good markets, some buyers simply will test the water.
- Remember when you were a home buyer. Did you want to offer less?
- Not allowing for outdated styles and features. This will bite your pride of ownership. You may have taken loving care of your home and could be content living in it the way it is.
- Why would buyers select your home over the other properties available? They may like the floor plan and location however they have seen the latest trends and homes with newer products, and they want those things.
- Buyers will guess at how much it will cost to update your house and begin deducting from the price. They may even deduct extra because those will be out of pocket rather than in the mortgage payment.
- The initial offer is too low and does not merit a counter offer. Are you sure?
- Well at least you have an offer. Someone is interested enough to invest time in making an offer.
- Be a business person, don’t be offended. You have an opportunity to negotiate. Neither you nor your agent know what the other party is willing to do and the buyer has no idea what you will do. Working in good faith is the best option. A little time and each party’s motivation is revealed to the other.
Many a seller has beat themselves in the marketplace. Placing a price on any property involves a large variety of factors and a bad misstep results in a painful dance to the end. It is a beauty contest and those with good looks, charm and meet most of a buyers criteria will win. A home is a very personal thing, yet when yours is on the market, it is just another house that buyers may choose to consider. In very raw terms, houses are a commodity. The housing market like that of oil, grain and precious metals is subject to fluctuations. Thankfully the housing market doesn’t fluctuate at the rapid pace that the typical commodity markets do. Listen to people who work in the real estate market full time. Mortgage lenders and Realtors have access to current data and can see trends up close. Each transaction is unique due to the property type, location, the buyers and sellers and the type of financing involved along with other factors the casual observer cannot address.