Pricing Your Property to Sell: Avoid These 7 Costly Mistakes
There are many reasons to sell right now: 2016 saw low inventory and strong buyer demand. Home prices are continuing on an upward swing, offering better returns. And interest rates are at what’s expected to be the lowest of 2017, prompting buyers to secure mortgages within the first half of the year.
If you’re considering selling and taking advantage of current market conditions, one of the first things you’re likely wondering is: “What’s my property worth?” Setting a property’s price is a highly strategic process, and an experienced real estate agent will be able to help you navigate it. However, there are a few common pricing misconceptions that can end up costing sellers in the end. Here’s what to avoid:
Pricing Too High
Negotiations are a part of most real estate transactions. However, pricing a home too high, knowing prospective buyers may come in lower, can actually end up costing the seller. What happens is the buyer’s agent – or the buyer – sets up search notifications within a select price range. If the home is priced above the price block, the seller will miss an entire audience segment and reduce the chance of it selling quickly.
Improperly Testing the Market
“Testing the market” can be tempting, but doing so without proper preparation can lead to a property sitting on the market for longer than it should. Prospective buyers will be interested in the full history of the home, and one that has been on the market multiple times within a short time period can raise concerns. In addition, a property that doesn’t sell within the first few weeks is likely to lose more margin. The best scenario is to put the property on the market once and have it sell right away, and that takes an expert real estate partner and detailed preparation.
Incorporating the Full Dollar Amount of Repairs & Upgrades
Upgrading the kitchen and bathroom can increase a home’s value by as much as 7 percent, according to Consumer Reports. While sellers may or may not recoup the total costs spent on upgrades, it will certainly make the property more attractive and meet current homebuyer expectations. It is especially important to consider the expectations of your specific audience. For instance, if you are selling a high-end real estate property, modern kitchens and updated bathrooms are expected and not necessarily considered “upgrades.”
Placing Personal Needs in Front of Market Facts
Coming from a “I need to make X amount off the sale of this home” perspective tends to set sellers up for disappointment. It’s always best to lean on comparable home sales, current market conditions and other facts when setting the price. When done correctly, you’ll be reaching the top dollar possible for your property.
Connecting Emotion and Price
Homes mean a great deal to their owners. So, when it comes to selling, it’s sometimes tough to place a dollar amount on such a special place. It’s always best to try and disconnect from the home’s sentimental value and treat it as a business investment. An objective mindset is a seller’s best tool.
Not Considering Feedback – Or Lack Thereof
The real estate market is fluid, and conditions can change from one day to the next. You’ll often see market forces at play within the first two weeks of a property listing. If your property hasn’t sold, it’s important to use any agent feedback to re-evaluate the listing price. An issue may need fixing to meet the expectations of that price point or the price may need to be dropped.
No agent feedback also speaks volumes. If the property has been sitting on the market for an extended period, it can raise red flags. For instance, real estate agents and their buyers may assume something is wrong with the home.
Using the Wrong Realtor – Or No Realtor
Be sure to partner with a real estate agent who has experience in your community and price point. This becomes even more important when selling luxury real estate as there can be much more at stake.
Not only do realtors have contacts with others in the industry, but they’ll provide a deep market analysis: the rate at which homes are selling in your area, strength of local school systems, key community highlights, and much, much more. In addition, there’s regulations and other small details that can lead to costly mistakes and bigger headaches. These are also many of the reasons why it can be costly to go it alone.
Often Overlooked Ways to Get Top Dollar
Once your property is properly priced, here are a few ways to ensure you get the full listing price.
Professional photography is especially important for luxury properties. While this should be handled by your realtor, it’s important to know that professional photography is being used to best showcase your property. Taking it a step further, drone footage has also become popular and gives prospective buyers a more interactive look at your lot and surrounding community.
The property should make buyers feel like home when they walk in — just not your personal home. In addition to de-personalizing the interior, your realtor and a professional stager can help strike that perfect balance of cozy and modern to help homebuyers envision their new space.
Be sure to bring furry friends with you or find a place for them to stay during showings. While pets bring so many of us great joy, you never know if they might bring allergies or anxiety for another. You certainly wouldn’t want to leave prospective buyers with a negative experience or simply distract them from focusing on your beautiful property.
In all, you only want to sell your home once, so it’s important to do it right the first time. Find an experienced real estate partner who can help you make the most of current market conditions, leverage all that your property has to offer and reach your home-selling goals.