Pricing your home can be a tricky process that requires both objective research and a gut feeling about your property and the current market. Achieving the optimal price will allow you to attract buyers, earn the most money possible, and sell as quickly as possible. In this article, we will discuss the importance of proper pricing, common reasons for overpricing, the dangers of overpricing, and the role of a real estate agent in pricing.
- The Importance of Proper Pricing
Proper pricing is critical to selling your home quickly and efficiently. When you price your home correctly, you can enjoy the following benefits:
- Faster sale and less inconvenience
- Exposure to more buyers
- Increases Realtors® response
- Generates more advertising/sign calls
- Attracts higher offers
- Means more money to the seller
- Avoids being "shopworn"
- Common Reasons for Overpricing
Overpricing is a common mistake that can cost you in the end. Here are some of the most common reasons why homeowners overprice their homes:
- Purchasing in a higher-priced area
- Original purchase price too high
- Lack of factual data
- Bargaining room
- Move isn't necessary
- Assessed value
- Emotional attachment
- Opinion of family and neighbors
- The Dangers of Overpricing
Overpricing can lead to a variety of problems that can prevent you from selling your home quickly and efficiently. Here are some of the dangers of overpricing:
- Most of the activity on your home will occur in the first few weeks. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
- Buyers who have seen most available homes in their price range are waiting for the "right house" to come on the market. That's why if a house is priced right, it will sell quickly. The buyers are there waiting for it.
- Don't start with a high price and the assumption that you can reduce it later. By the time you decide to lower the price, it may be too late, as interest will have already waned.
- A major cause for concern is appraisal problems; overpricing can lead to loan rejections and lost time.
- Even if your home is nicer than other homes in the same area, your house won't be picked for viewing if you set the price too high.
- Buyers and agents become aware of the long exposure period and often are hesitant to make an offer because they fear something is wrong with the property.
- Attracting the wrong buyers.
- Fewer potentially qualified buyers will respond.
- You might help sell similar homes that are priced low.
- You could lose money as a result of making extra mortgage payments while incurring taxes, insurance, and unplanned maintenance costs.
- The Role of a Real Estate Agent in Pricing
A real estate agent can be an invaluable resource when it comes to pricing your home. Here are some of the ways that a real estate agent can help you:
- Provide you with a comparative market analysis (CMA), a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMA is performed by comparing previously sold homes in the area, and currently active homes to know your competition.
- Keep in touch with market trends and keep up to date with market activity of comparable homes.
- Estimate your net proceeds.
- Help to determine offering incentives.
- An agent has NO control over the market, only the marketing plan. Never select an agent based on price.
In conclusion, pricing your home is both an art and a science. Achieving the optimal price requires both objective research and a gut feeling about your property and the current market. Proper pricing is critical to selling