Many people who put up their homes or properties for sale are usually confused as to the best price to tag their property and often times they make pricing mistakes. This article delves into the worst pricing mistakes a seller can make.
If a house that has been put up for sale doesn’t leave the market for a long while, this phenomenon is due to several factors, no doubt. Albeit one major reason why a property lacks the needed attention required in a long period of time always come down to pricing error. Error in house pricing is a common mistake people make in the property market.
Here are the common pricing mistakes that jeopardizes a seller’s chances of selling his/her property
Avoid Chasing the Highest Sale Price
It’s natural to dream of achieving a high profit when you are preparing to sell your home, but it’s important to remain realistic during the sale process. As you compare and select a real estate agent to work with, don’t automatically go for the one who gives you the highest property valuation. Although the thought of more cash at the end of the transaction will certainly be appealing, this could be an unrealistic dream that ends up wasting your time and money. Chasing after an unrealistic, highest quoted sale price can be the worst mistake that a seller can make.
The True Price for your Property
You may have a certain ideal value in your head when it comes to your property, but that figure, as well as the one that the real estate agent gives you, is sadly not that important. Ultimately, what matters is what the buyer thinks.
To find out what a buyer is realistically likely to pay for your property, you need to take a look at what similar homes in your location have sold for. The next step is to adjust these numbers either up or down to reflect any differences in features or amenities – you should be able to get a rough guide of how much value is added (or subtracted) by looking at a broad range of sales in your area. In addition to assessing the local competition, the true price of your home will also depend on the supply and demand in your region, as well as the current state of the whole market.
Taking care of this extensive type of comparative market analysis will give you (and your real estate agent) a more accurate picture of the price range that buyers will be willing to offer. This is roughly the technique that a valuer uses to appraise properties, so it’s the most realistic type of analysis. Rather than choosing a single fixed price, look at the price range as a whole. No two valuations will ever be the same, so you need to work with a range of estimates.
Pricing a Property too Low
The worst mistake that a seller can make is pricing the property too high, and contrary to common assumption, you can’t really price a property too low. If the property’s price has been low-balled, this isn’t really as much of a concern because the competing homes in your area will be priced higher and yours will get extra attention. This generally results in a higher number of offers, as well as higher quality offers and the end result will be a price that is closer to the true market value of the property. The real risk is setting the bar too high and choosing a real estate agent based on an unrealistic valuation.
The Danger of a Failed Real Estate Sale
If you choose a real estate agent based on a high valuation of the property, you run the risk of ending up with a home that is left sitting on the market until its listing becomes irrelevant.. A real estate agent may inflate the price because they’re not familiar enough with the area or because they were just trying to get your business. Of course hiring a second real estate agent to try and sell your home is also fraught with risk. The agent may lower the price to try and attract offers without undertaking an accurate analysis to figure out how the house should actually be priced. A lowered price on a house that has already been on the market for a while is likely to have buyers becoming suspicious and thinking that something is wrong with the property. This could lead to decreased attention, few prospecting clients inspecting the property, and several more months passing without any sign of a sale.
Avoid Significant Losses
Protect yourself as you get started to avoid taking a financial hit. Sellers can lose a great deal of money after an initial listing has expired. The house will need to be kept up to a high standard for inspection . The biggest hit will come if you succumb when buyers offer you a low offer because your house has been on the market for too long. Take care to avoid all of these problems by doing everything in your power to price your house correctly from the beginning.
One of the best tools at your disposal is a real estate agent or valuer who will help you obtain an accurate home valuation. This can be done by choosing to work with a professional who has knowledge and experience of your specific market.