The most important decision to make when selling a home is Pricing. Here are some are the biggest seller pricing mistakes.
Pricing your home based on other homes currently on the market, and ignoring the price of homes that have sold. A Realtor’s Comparative Market Analysis takes into account both types of properties when suggesting a listing price. Sold comps gives a feel of what a home is probably worth. We also look at the price of the homes currently on the market to get a feel for the pricing you need to beat. The market price is based on what has sold.
Overvalue things you own. The biggest factors in establishing the price of a home are location and size. The next aspects to consider are style, condition, lot quality. Amenities (saunas, granite counters, upscale appliances) fall into last place when pricing a home. The amenity factor is dependent on whether buyer sees it as a plus or a negative, and has less of an impact on price than some sellers would like.
Expecting full value for all home improvements you’ve made. Uh, no. It is foolish to expect to receive 100% back on the costs of improvements you’ve made over the years. A house goes up in value in a good market; a new roof, kitchen cabinets, remodeled bathroom, etc. go down in value just like a car. Check out “Key Trends in the 2016 Cost vs. Value Report”
Some sellers base the price on what they need to net in order to move on. The long of the short of this is buyers don’t much care what a seller needs for down payment on their next home. Offers to purchase a home are based on what other homes in the area have sold for as well as the price of the other homes currently on the market. Buyers will not pay more for a home because a seller requires more “net proceeds” at the closing table.
Relying on any automated valuation model, like Zillow’s Zestimate. The value generated by an automated valuation model is not as accurate as an actual comparative market analysis provided by a real estate agent or an appraiser. Heck, Zillow admits to a national median error rate of 8 percent. That’s a huge amount of money to be off by when pricing your home. The last thing a seller should want is for the home to sit on the market and become stale because it is priced too high.
Don’t be rigid in your pricing. In the end, the market will determine the correct price for your home. If you price too high, your home just sits there with very few showings if any. The buyers (and the market) are telling you to lower your price. Listen to them. The flip side is if you price too low, you’ll have tons of showings which may drive up the initial asking price.
Bottom line, contact a Realtor to get a complimentary Comparative Market Analysis so you can make a sound business decision when it comes to pricing your home. It is up to you then whether to list your home with a Realtor or to sell it For Sale By Owner (FSBO). At the very least you will know what the market is around you. If you don’t want to use a Realtor, then consider contacting an appraiser to get a pre-listing appraisal at cost.