The Number One Selling Mistake You Can Make
Pricing your home too high in the marketplace is the single, worst mistake new homesellers make when listing their homes. The train of thought is that they'll list high, then come down as needed, or negotiate when the offers come pouring in. The problem is, for those homes, they rarely do.
But We Want More Money
When the average homeseller sits down to interview real estate agents, it's easy to get caught up in the excitement over choosing a sales price. More money means more financial opportunities. Perhaps it means you can afford to buy a more expensive home, help pay for your child's college education or take that greatly overdue vacation. Unfortunately, uninformed sellers often choose the listing agent who suggests the highest list price, which is the worst mistake a homeseller can make.
The truth is it doesn't really matter how much money you think your home is worth. Nor does it matter what your agent thinks or ten other agents just like him. The person whose opinion matters is the buyer who makes an offer. Pricing homes is part art and part science. It involves comparing similar properties, making adjustments for the differences among them, tracking market movements and taking stock of present inventory, all in an attempt to come up with a range of value, an educated opinion. This method is the same way an appraiser evaluates a home. And no two appraisals are ever exactly the same; however, they are generally close to each other. In other words, there is no hard and fast price tag to slap on your home. It's only an educated guess and the market will dictate the price.
Is it Too Low?
Homes sell at a price a buyer is willing to pay and a seller is willing to accept. If a home is priced too low, priced under the competition, the seller should receive multiple offers to drive up the price to market value. So there is little danger in pricing a home too low. The danger lies in pricing it too high and selecting your agent solely on opinion of value.
How It Starts To Go Wrong
The seller of the home pictured on this page didn't even interview her real estate agent. She plucked the first one off the Internet because, "He looked like such a nice guy." He priced her home at $210,000. This agent never heard the local agents chuckling behind his back because he worked in a different city. After 90 days, the listing expired.
Continues To Go Wrong
The next agent, also from another town, listed the home at $200,000. Months passed. Eventually the price dropped to under $190,000. Still no takers. A few lookie-loos, but no serious buyers.
More Than a Year Later
By the time the last agent was hired to list this home, the seller had grown weary and exhausted. It was now 12 months later. Together, the seller and her agent priced the home at $169,000. It immediately sold for all cash. The sad part is the comparable sales in the neighborhood fully justified a price of $180,000, but the home had been on the market for too long at the wrong price, and now the market had softened.
The question is how much money have those expired listings cost you, the seller? The financial loss often exceeds the extra mortgage payments paid and goes beyond the uncompensated hassle factor of trying to keep a home spotless during showings. It affects the value that a buyer ultimately chooses to pay because it's not a fresh listing anymore. It's now stale, dated, a market-worn home that was overpriced for too long. Don't let it happen to you. Don't be that seller of an expired listing.