Not Sure How to Price Your Home? Expert Strategies Help You Hit the Spot
The Pitfalls of Overpricing
Homeowners often think that it's OK to overprice at first, because - who knows? - maybe you'll just get what you're asking for. Although you can certainly lower an inflated price later, you'll sacrifice a lot in the process. The most obvious damage: A house that remains on the market for months can prevent you from moving into your dream home. Already purchased that next home? You might saddle yourself with two mortgages.
The Pricing Traps
It's easy for homeowners to stumble into two common traps:
1. Conflating actual value with sentimental value - how much they assume their home's worth because they lived there and loved the time they spent there.
2. Assuming renovations should result in a dollar-for-dollar increase in the selling price - or more.
"Many homeowners think, 'Of course my home is worth a bazillion dollars.'" If they put in a few thousand dollars worth of new flooring, for example, they might overestimate the upgrade's impact on the home's value into the tens of thousands. Smart renovations make your home more comfortable and functional, but should typically reflect the neighborhood.
Another culprit for many a mispriced home is online tools, like Zillow's "Zestimate," that prescribe an estimated market value based on local data. The estimate is often wildly inaccurate.
The Right Stats for the Right Price
If you decide to consult us, we will use something called comps (also known as "comparable sales") to determine the appropriate listing price. We won't just be looking at your neighbors; we'll be seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.
Once we've assembled a list of similar homes (and the real prices buyers paid), we can make an accurate estimate of what you can expect to receive for your home. After crunching the data, we'll work with you to determine a fair price that'll entice buyers. The number might be less than you hope and expect, but listing your home correctly - not idealistically - is a sure way to avoid the aches and pains of a long, drawn-out listing that just won't sell.
Knowing When the Price is Too High
Once your home is on the market, you'll start accumulating another set of data that will serve as the ultimate price test: how buyers react.
There's an easy way to tell if you've priced too high: If you have no showings, it's way too high. Lots of showings and no offer means you've marketed well - but it's overpriced once people get inside.
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