Pricing Your Home Right Makes a Big Difference
Your house could be perfect in and out but none of that matters if the price is not right. The right price is one that’s in tune with what similar homes in your market are selling for. You may want to ask for as much as possible, but not so much that you turn away potential buyers. Overpricing your home – or underpricing it – can negatively impact its sale.
If you’re working with a real estate agent, your agent can help you with market research, data, and accurate home value assessment to price your home strategically. Listen to your agent because you’re better off getting the price right the first time around.
Check the infographic below to see why pricing your home correctly from the start ensures that your home will attract the maximum number of potential buyers able to pay the price your home is worth.
Consequences of Overpricing
Many sellers choose to ignore the market. Believing that pricing their home high initially is a good strategy. The thing is, many sellers fail to realize that pricing a home higher than it should be priced does not increase the chances of selling it for more.
Here are a few common consequences of overpricing that home sellers encounter:
Time
When you put your home on the market, you certainly want to spark interest in some potential buyers. Your home for sale should be appealing and at a price point similar or better to comparable homes in your area. When your home is priced too high, it may be ignored by buyers and placed into a “wait and see” category. You lose out on any potential business stoked by early market excitement.
If your home languished on the market, you may be forced to move the price down than your original asking price. But by that time the home has been for sale too long, buyers will become wary and wonder why the house has been on the market for so long. Some will suspect there is something wrong with your house that is affecting its ability to sell.
Negative perception
A home sitting on the market for long has the risk of getting a negative perception. The longer your home sits unsold, the more negatively it is viewed. It must be too expensive to sit for so long, or buyers will think that there must be something wrong with your property. Real estate agents working for buyers may steer them away from your property or tell them to wait for a drop in price.
When you drop your asking price you might finally see an influx of potential buyers, but only these buyers may see you as an easy target and hit you with low ball offers that can be equally upsetting and frustrating.
Appraisal problem
Even if you find a buyer willing to pay for an overpriced home, they may have difficulty getting financing. For your buyer to get a loan, the bank will need to have your home appraised. Your buyer’s appraiser will use the prices of nearby, comparable homes to help determine the price of your home. If the appraiser determines that your price is too high, it can cause a delay in the mortgage process, and worst, the buyer’s lenders may not approve the loan.
Exposure to potential buyers
If your home is overpriced, buyers looking in a lower price range may never even see your home’s listing. Buyers who use the Internet in their home search certainly put criteria into a search to filter properties that match their home criteria. It may seem a small thing, but when you price your home too far above the comps, you remove yourself out of these searches. Those who can afford a home at your asking price will quickly recognize that they can get better value elsewhere.
Mortgage payments
The longer your home sits on the market, the more money you pour into a property that you will not get back. With a high price, there is no negotiating up. If you fail to attract potential buyers, you may end up trying to pay two mortgages, or in the worst situation, in foreclosure.
Attract More Buyers
Do not be tempted to sell your home for more than the market value, even if you are willing to accept a lower offer later, just to see if there are any takers.
Let’s say you’re listing your home at $300,000 but your home’s worth according to your market research is just $250,000 – and you’re willing to sell for that amount. But you still list at $300,000 to see if there are any takers at the higher price.
A serious buyer may have a budget of $250,000 and searches online for listings at the range of 250k to 275k. That buyer may not even see your home unless you lower your asking price. It’s better to price your home right to get the most attention from potential buyers.
Take a look at the infographic below and see how pricing a home at fair market value gets fair exposure to potential buyers.
How to price your home right
How do you set the correct price for your home to sell? There are several things to consider in pricing your home.
Property condition – Check your home’s major systems such as the furnace, central air, electrical system, as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances. Better yet, hire a home inspector it would save you trouble when you already know what needs to be repaired before you even agree on a purchase price. Sometimes, home sellers find themselves asked to make costly repairs or price reduction after the home inspector checked the house that is already under contract. A pre-inspected house can be good as a marketing tool too.
Market condition – Is it moving up or down? The more you know about the condition of your local market, the better your chances of getting the best possible price for your home. The market value of your home is affected by the inventory of homes currently on the market, the demand or the number of people looking to buy property, mortgage rates, and the condition of the economy both local and national.
Inventory – check out your local market to see if the inventory is high or low. If it’s a hot market, when the demand is greater than supply, homes usually sell very quickly and may sell above asking price.
Interest rates – The interest rate has a major impact on home values. The demand for housing increases when rates are low or falling and vice versa.
Local competition – Check out the active competition in your area. Get comparable properties from your agent. Your agent can give you a general market analysis of your neighborhood to see if there are lots of comparable homes available in your area.
Location – The location of your home is a factor to consider too, if your property is located in a desirable neighborhood, chances are you may get your asking price or more.
Selling your Upstate area home for the highest possible price
The J. Michael Manley Team consistently sells homes faster and for more money in the Upstate area. Our honest and accurate approach to pricing homes in the Upstate area provides our clients with a solid understanding of what their property is truly worth in today’s market. We have a team of experts who have provided values for hundreds of properties in our area using the most accurate and relevant data, so you can feel confident in our home value opinions. We offer no-obligation home valuations, so you find out your home’s current value even if you don’t plan on selling it right now. Learn more about selling your home in the Upstate, SC, and contact us when you’re ready to sell.
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