Selling a home is a difficult process, but it shouldn’t be impossible. ?In fact, it can be relatively easy if you avoid common mistakes. The most common mistake seller’s make is overpricing. The correct pricing of a home is an important factor in whether a home sells quickly or flounders on the market for a long time.
When a property is overpriced, it doesn’t matter if the seller hired the best real estate agent in their market who has an excellent marketing plan, the home will not sell. Accurate market value pricing is essential the marketing and sale of a home or any real estate.
Placing a home on the market home at the correct price will almost guarantee that there will be plenty of showing and a buyer will make an offer in a reasonable amount of time for that market. Unfortunately, determining a home’s market value is not an easy process. If it was as simple as listing a home for it’s assessed value or for what Zillow’s “Zestimates” say a home is worth, there would be no need for real estate agents or appraisers.
Seller’s must avoid overpricing in order to avoid the damaging effect of a prolonged marketing period. Here are four common mistakes many sellers make when pricing a home for sale!
Pricing the Home High to Leave Room to Negotiate
Many sellers believe that it is a common practice of a buyer to offer lower than the house is listed for. In most cases, this is the farthest from the truth.
A seller who lists their home for $10,000 more than a real estate agent recommends because they believe this will leave them with $10,000 in negotiating room is making a huge mistake. Today home buyers are extremely knowledgeable and savvy. The internet has made it extremely easy for consumers (in general) to obtain information. If a home is overpriced, buyers will not look at it. So, the home owner who prices their home higher to leave room to negotiate won’t have anything to negotiate because potential buyers won’t waste their time looking at a home they know is overpriced.
If a home is priced correctly, the buyer’s real estate agent should be providing their client with information so they can make an educated decision on what to offer a seller. It is still possible in this situation that a buyer will make an offer that is much less than what a home is listed for, however not as common. Listing a home for market value and not listing it to leave room for negotiating, will more times than not, get a seller more money in a shorter amount of time!
Pricing the Home with the Real Estate Agent who Offers the Highest List Price
In every local real estate market there are agents who “buy listings.” An agent who “buys a listing” will tell a seller their home is worth an unrealistic amount of money, just to obtain the listing. This is doing a huge disservice to any seller and the agent. A seller who interviews (interviewing is an important tip to help ensure the “right” real estate agent is selected to sell a home) three agents and selects an agent solely because the agent said their home was worth $50,000 more than the other two agents did, and doesn’t have facts to back it up, is making a huge pricing mistake.
Real estate agents are in the business to sell houses and offering a list price that is unrealistic is not going to accomplish this, thus wasting their prospective sellers time as well as their own!
Pricing the Home without Having A Professional Real Estate Agent Perform a Comparative Market Analysis
As mentioned above, pricing real estate is not an easy process. There are many factors that a real estate agent takes into account when pricing a home (not to mention years of experience).
A great real estate agent will spend hours researching and “massaging” data prior to determining what they’d suggest a seller lists their home for. A top real estate agent will complete a comparative market analysis, also known as a CMA. There are many sellers who don’t know what a comparative market analysis is, most of the time this is because their real estate agent neglected to perform one, neglected to review their CMA with their client, or their agent never even offered to explain exactly what a CMA is and what is involved with it!
A seller who does not have a comparative market analysis performed on their home is making a huge mistake as is the Realtor. If a CMA is completed correctly, a home should sell relatively close to the list price and in a relatively short amount of time. If a comparative market analysis is not completed on a home, there is also the possibility that there could be problems with the home under appraising. The purpose of a market analysis is not only to determine a realistic listing price and probable sale price of a home, but also to reduce the chance the home under appraises!
Pricing the Home High because the Seller has Time
Pricing a home high because the seller has time means the house will sit on the market. Homes that sit on the market for a long time develop a stigma. Buyers and agents start to ask questions, like, “what is wrong with the home?” It’s possible that there is nothing wrong with the home, other than being overpriced.
If it’s priced right, it will sell. Pricing mistakes in can be avoided, if sellers are aware them and the affects they have on selling a home. If priced correctly, there should be several showings within the first couple days on the market and also an offer in hand within a reasonable time for that market (every market is different an experienced agent will know the average time to contract for that locale). If that doesn’t happen, then there’s a reason the home is not selling, normally the price is too high.
Selling your home in the greater St Petersburg, Florida area? Or, anywhere in the Tampa Bay Area? It is extremely important to make sure you price your home correctly. We’d love to prepare a complimentary comparative market analysis specifically designed and tailored for your home. You will also receive a comprehensive marketing plan that is also designed specifically for each of our homes for sale. Contact us and get your today.
Article by Oscar T. Blasingame, Esq.