PRICE IT RIGHT
Here’s a riddle for you: What do homebuyers care about more than “location, location, location” in finding the house of their dreams?
Luxury upgrades? Sorry.
The answer is:
The first thing buyers look at in their home search is the price. No matter how perfect the house, it’s a big “NO” if the price doesn’t line up with a buyer’s budget. If you miss the bar by a thousand dollars, you could lose out on an entire pool of potential buyers.
Real estate agents deal with this every day. Homeowners fantasize about an ideal list price for their home, even though it doesn’t align with the current real estate market.
So, here is a little dose of reality you need: Just like the “location, location, location,” cliché, there are few myths you need to block out of your mind when pricing your home to sell fast and for more.
Myth #1: Price your home higher to make more money.
One of the biggest mistakes you can make is to overprice your home. A higher list price will not translate to more money in your lap.
Listing your home above market value could cause it to sit on the market longer and make buyers wonder why it hasn’t sold.
Buyers these days are smart—they see comparable homes in your area online every day, they gather their own data, and they know how long a house has been on the market. Plus, the home appraisal will reveal the real value.
To sell your home for the most money possible, you need to price it right.
If we’re at $259,000, I’m going to suggest; we should price it below $250,000 because buyers search for homes in $25,000 increments online. “If you’re aiming for a buyer who will pay $250,000, you need to price it in that category.”
Myth #2: If you think your home is worth more, ignore the comps.
Everyone’s home is unique to them, so everyone thinks their house is worth more than their neighbors’. However, when it comes down to it, buyers and their real estate agents compare house prices based on the facts.
Comparable homes have the same number of bedrooms and bathrooms, approximate square footage, and age as other homes in the area that were have sold within the past 3-6 months.
Your real estate agent will help you know if your home can be priced higher than the comps in your area. Typically, you can get away with pricing your home higher than the comps when it has one or more of the following things:
¨ More bedrooms or bathrooms
¨ Added features such as an attached garage, a finished basement, or master suite
¨ Larger lot size
¨ Low market competition
If there are 5 or 6 homes on the market, I’m going to say; if you want to sell, what’s more important: time or money. If you're going to sell it in 60 days, we need to be below your competition.”
Myth #3: The internet says your house is worth “X,” so that’s the price you can list it.
With all the home value estimators online nowadays, it’s quick and easy to get various estimations of what your home is worth with the click of a button. However, when you try to figure out how much your house will sell for, the internet can be a useful starting point but should not be your end game.
When you decide to sell your house, it’s harmless to compare online home value estimators with a trusted tool such as dixie.viewhomesinspokane.com. But don’t get too excited. This value is a general ballpark amount that your house may or may not be worth based on the limited data available.
Worst case scenario, the estimate sets your expectations too high from the beginning, making it difficult for you to reconcile with a lower price point mentally.
We as Real estate agents factor in hundreds of minor details that aren’t always measured by AVMs, like a home’s proximity to a power line, noise levels, position on a steep hill, or general buyer sentiment in the area.
The best way to find out how much your house is worth is to meet with a top real estate agent. An experienced real estate agent with knowledge of the area can conduct a comparative market analysis (CMA) to tell you the actual value of your home.
Myth #4: Include the cost of renovations or updates you’ve made in your home’s list price, dollar for dollar.
It may come as a surprise, but not all home renovations have a positive ROI. Remodeling Magazine reported that the average payback for 20 of the most common professional remodeling projects in 100 major U.S. markets was only 56.8%.
Remodeling projects are tricky––the wrong project in the wrong market could cost more time and money than it’s worth. If you factor every dollar you’ve ever spent on your home into your list price, you’ll lose even more time and money when your overpriced home sits on the market. Talk to your Realtor.
Myth #5. Price reductions always give your listing a bad rap.
Contrary to popular belief, price reductions aren’t all bad. Sometimes reduce a list price by $1,000-$2,000 to get buyer attention. Trust your agent on whether this is a good idea for your circumstance. Top-notch real estate professionals are also savvy marketers, so they’ll know when to pull out certain tricks in the book to drum up buzz.
Myth #6: If you accept the first offer that comes your way, you priced your house too low.
Fast offers aren’t a bad sign––especially if the first offer you receive is full price. If a buyer wants a home, they’ll make a competitive offer right off the bat to stand out against other buyers.
Don’t hesitate to accept the first offer. It could be the best one you get. Plus, full-price offers are a sign that you priced your house right.
Myth #7: Be patient, there’s no harm in waiting around for the right offer.
When your house is on the market, it’s easy to think, this offer is too low, or this buyer isn’t perfect. The reality is: if you wait around for a generous offer from the perfect buyer, your house will never sell. When a house sits on the market, it becomes stale and obsolete.
Once you receive an offer or (hopefully) offers, sit down with your real estate agent to figure out your next move. If an offer is lower than what you’re comfortable with, counter back with something higher. Negotiations are a part of the game, and a top real estate agent can help turn a subpar offer into a deal everyone’s happy with.
Here are some tips to make a reasonable counteroffer:
¨ Separate your wants from your needs. Don’t expect a buyer to agree to every single term. Put your vital needs first to show the buyer what you aren’t willing to compromise on.
¨ Take another look at the comparable homes in your neighborhood. If you receive a lowball offer and the comps are significantly higher, you have reasonable justification to counter back.
¨ Listen to the advice of your real estate agent. Your real estate agent is there to help you through tough negotiations. They can tell you how much your home is worth, when to counter back, and when to walk away.
Bottom Line: Don’t listen to myths about pricing your home to sell
Using a top real estate agent’s comparative market analysis, you can price your home to sell fast and for more money. Remember these three things when pricing your home to sell based on an evaluation of the comps:
¨ Stay within the price range of the comparable homes in your area.
¨ Factor in the cost of renovations only if they add value to your home.
¨ Don’t base your list price on online home value estimates.
Find the perfect list price for your home by working with a real estate agent who’s an expert in your area.
Feel Free to contact me: I am Happy to Help.
Dixie Simon @ 509-385-4441