How do you price your home to sell quickly and for the highest price possible?
After selling real estate for over 35 years, Brian & Myles have heard several pricing strategies from sellers. Here are a few of the ways that sellers have determined their price and our feedback on these "strategies".
"That is the price…because I won't take a penny less"
Sellers commonly want to price their home based on the motivation of "that's what I want". When a real estate market is extremely hot (such as in 2007),we did see multiple offers on homes that exceeded the list price. However, in a balanced or more moderate market, this just simply does not work. Many times, sellers do not have an idea of what the current market value is for their property. We also see a "value distortion" take place when someone wants to sell a property that they have inherited or renovated to suit their lifestyle, but really would not add as much value as the costs they incurred. A good illustration of this might be a seller installs bright pink carpet throughout their home, or if a seller has a huge pool with hot tub and then customizes the bottom of the pool with their initials. It is fair to say that these renovations cost the seller, but that it may be difficult to recoup their investment as a result. It is important for a seller to get a current market analysis done by Brian & Myles that will include all properties currently listed for sale and recently sold properties similar to the seller's to determine a value.
"My grass is greener"
Another common misconception is for a seller to state, "well my neighbor has his listed for x and mine is better, so I want y". Just because your neighbor has his listed does not mean he will get it as he may be in the 5% of homes that do not sell. The key is to look at the sold houses in your neighborhood first, and then look at comparable homes selling in other neighborhoods. If nothing is selling in your neighborhood, people may be getting better deals elsewhere. Even if you use this information above, you still have to make sure you are comparing your home with correct comparables.
"My 2 Bedroom Home is Worth the Same as a 3 Bedroom Home"
Sellers seldom seem to compare apples to apples. It means that if a three bedroom house sold for a certain amount, the seller thinks he should get the same amount for his two bedroom house. The Buyer Profile released in June 2010 clearly show shown that three bedroom, two bath houses are more in demand than any other type of house. It is important to put yourself in the buyer's shoe. Would you pay $10,000 less for a house, when for a slight increase in payment, you can have the three bedroom house and more space? In most cases, a two bedroom house will need to be priced a lot lower than a three bedroom.
"My home is in mint condition"
It is very hard for sellers to view their home objectively. Because of this, home staging has become popular for sellers to allow their home to be "staged" to appeal to a larger buying audience. Often times, sellers do not feel that a crammed closet, leftover pizza on the counter, or missing trim is all that important. However, for buyers, any perceived imperfection may result in them discounting the home simply because they feel that the home has not been maintained. It is so important for sellers to really go through each room in their home, and ensure that doors open, any marks on the walls are repaired, etc. Even after a buyer makes an offer on a home, they usually have a home inspection done which can result in defects being found that the seller may not even be aware of. Sometimes sellers will get defensive about these inspections reports and refuse to do the repairs. In this market, you will lose the buyer because there are so many other motivated home sellers willing to do the work.