Common Mistakes to Avoid When Pricing Your Home
Pricing a home is not a simple process, and sellers are not immune to making mistakes that will waste both time and money. Have a stress-free home sale by avoiding these four pricing mistakes that sellers commonly make when pricing their home.
Mistake #1: Foregoing Research
Local market information is freely available online, so be sure to use it to your advantage! Look for homes similar to yours that have been listed in your neighborhood over the past six months to get a rough estimate of what your home would be worth. You’ll want to stay within a ¼ mile to a ½ mile from your home unless there are not many comps in the vicinity or the property is in a rural area. It’s very easy to be fooled looking at a website online where it gives you a very high price on your home, that’s where a listing agent comes in to help you navigate.
Mistake #2: Hiring the Wrong Agent
Now that you’ve done some research, it’s time to find an agent that will keep your best interest in mind. When pricing your home, a listing agent has your back in ways that online property listing sites just can’t compete with. An experienced agent:
- Has real world experience and connections in your community.
- Knows your neighborhood’s micro-market like the back of their hand.
- Can properly assess with their expertise how your home stacks up to similar ones recently sold in your area.
- Can personally tour your property to see where your home fits in the real estate landscape.
A good listing agent will consider online market data as well as rely on first-hand knowledge about your home and neighborhood’s unique features to make an informed listing price for you. Listing agents can also help with marketing your home by suggesting certain social media platforms to post on, introduce you to pro stages, inspectors, and contractors who can make any needed changes or repairs.
Mistake #3: Pricing Too High from the Start
Your home can either make a good or bad initial impression to buyers from your first listing price. It’s worth it to make sure you set it at a reasonable price to begin with. According to the National Association of Realtors, in 2020 they reported that sellers typically sold their homes for 99% of the listing price, while 38% reported reducing the asking price at least once. If your home enters the market overpriced, many buyers could overlook your property from the beginning because it will be out of their price range. By the time you are able to react and adjust the price, many potential buyers will have already found something else. Other buyers may be interested in the lowered price, but they’ll also be able to see that your home has been sitting on the market for a while and may wonder if there is something wrong with the home. Avoid this mistake by working with a real estate professional to correctly price your home the first time to gain the attention of serious buyers and sell more quickly.
Mistake #4: Getting Too Emotionally Involved
It’s likely you’ve spent a great amount of time, money, and energy transforming your property into a place you call home. It’s completely normal to be emotionally invested in its sale. On the other hand, buyers won’t have that same warm fuzzy feeling about your home as you do – so what you think your home is worth shouldn’t be a factor in determining your listing price. Try to stay objective during the pricing process and focus on the statistics from your real estate agent’s CMA (Comparative Market Analysis). Similarly, don’t be personally offended by lowball offers. Instead, think of these lowball offers as a starting point of negotiation that could result in a sale.