As an experienced realtor, you know immediately when you step in the door of a listing clients home what the market will bear. Unfortunately, many times the homeowner is wearing blinders, in denial about what their home will fetch, or simply unrealistic about how they are valuing their home.
This can make for a difficult conversation and selling process. Pricing the home too high will see it sit, even in this brisk market Raleigh-Durham is enjoying this spring. A home in North Raleigh is experiencing this right now.
Listed about $30,000 too high – 6 other homes on the street have been listed this past month and sold within days – while this one still remains. And, this is the second time in two years this house has been listed too high for the neighborhood and market.
The realtor on this listing really needs to have the difficult discussion with their client that nobody wants to have. But this house will never sell at the price listed and it is now perceived as “broken.” They don’t have to argue with the client, but the realtor really needs to show on paper why this house is not priced right.
They are also missing out on people finding the house – the high end price tag eliminates anyone who is not searching in that price range. Agents perform searched by $5K or $10K round lots – so this house is missing out on either 6 or 3 groups of families searching in the price ranges below their listing.
On the other hand, pricing too low means you left some money on the table, for you and your client.
9 Pricing Mistakes to Avoid When Selling Your Home
1. Don’t compare apples to avocados. Your neighbor’s home sold recently, but it has a three-car garage, a pool, brand-new appliances, and a cracked foundation. Your house doesn’t have any of these things, so it probably isn’t worth the same amount.
2. Don’t go way back in time. Real estate prices can move up or down quickly. Old sales have little bearing on the amount you should ask for your home today.
3. Don’t look far away. You know that location matters. A recent sale of a property just like yours doesn’t mean much if the home is across town. Sometimes property values can even vary from one block to the next.
4. Don’t put a price on your memories. No buyer will pay more because the house was in your family for three generations.
5. Don’t start high to allow room for negotiations. Most home seekers ignore overpriced homes. They don’t want to deal with unreasonable sellers. Plus, buyers wonder what’s wrong with a house that sits unsold. You may eventually have to lower the price below what would have attracted an offer if you had started out with a reasonable number.
6. Don’t take the tax man’s word on it. Yes, valuations from your county appraisal district are supposed to reflect the real market value of properties. That doesn’t mean they do.
7. Don’t think that anyone cares about your needs. You may want to net a certain amount from the sale of your home to buy another property or pay down debt; unfortunately, that doesn’t matter to buyers.
8. Don’t add in the exact cost of your upgrades. Sure, a remodeled kitchen boosts your home’s value, but how much? It could be more than you paid or less.
9. Don’t rely on unreliable sources. You can find websites that tell you how much your home is worth. Look closely at what they say about their accuracy, though. Depending on the source and the market, as many as half of those estimates are off by at least 20%.
When you’re dealing with difficult people, there is an expectation that you will either react or counter-attack. Don’t take the bait. Soften your tone of voice deliberately, and speak with courtesy, professionalism and respect.
Remove your personal feelings from the conversation – hard to do – but worth it in the long run…and the house will get priced correctly!