You don't want to overprice the house because you're going to lose the freshness of the home's appeal after the first two to three weeks of showings. Demand and interest usually wane after 21 days.
So, it’s important to ignore the myths that are floating out there and concentrate on facts rather than fiction. There are plenty of myths that can cause you to lose sleep at night and here are just a few to avoid as they can prevent a successful sale.
1. "Higher asking prices lead to higher sale prices."
This is NEVER true when the price is WRONG. Don’t overprice your home! It is one of the biggest mistakes sellers make and prevents a lot of homes from selling.
2. "An offer right away means the agent priced it too low!"
When sellers receive an offer early, many can’t help but wonder, “Should we have priced it higher? Did our agent price it too low?” While it’s natural to have doubts when you get an offer quickly, it is most likely that your home was priced accurately and attractively. If you trust your agent, you know he based the price on solid market research. Be happy your sale is headed in the right direction.
3. "If we hold out, a better offer will come along!"
An offer after the first showing, may make sellers skeptical or hesitant to accept it. They start wondering if other prospects might be willing to offer more. While it may be tempting to wait for a bidding war, it is best to remember the old adage, “A bird in the hand is worth two in the bush?” It can be risky to see if you can get higher bids. If the offer is a fair one, strongly consider it.
4. "We should price it high, then we will have room to negotiate!"
Everyone wants to get top dollar for their home. However, overpricing it thinking you will accept a lower offer, may just leave you with nothing. Dropping the price multiple times may have buyers wondering what’s wrong with the property not what is wrong with the price.
5. "Zestimate always knows what my home is worth!"
Too many times, homeowners are eager to believe Zestimates or other automated valuation models when that price is higher than they expected. But when it is lower, they assume it’s outdated information or wrong. Avoid this pitfall and trust your agent. An experienced agent will evaluate all similar homes that have been listed in your area over the last three months, (appraisers don't use comps that are older than three months) and determine the best price based on how much your house is worth.
6. "All renovation costs can be added to the asking price!"
You may may love the improvements and renovations you’ve made and want to add in those costs to your asking price. However, not every change is going to deliver huge returns. Remodeling Magazine‘s annual ‘Cost Versus Value’ report will give you an idea of which upgrades yield the biggest return.
7. "My realtor just wants a big commission, so he/she overpriced my house to make a larger commission."
Agents are paid a percentage of the selling price of the home. The reality of the situation is this. Even if they were to raise the asking price by $25,000, in most cases that would only yield an additional $1,500 in commission. This would then be divided between the agent's broker and the buyer’s agent, leaving your agent with less than $750 more in his or her pocket. A good agent would never jeopardize a potential sale and risk weeks or months of additional showings and marketing expenses for a few hundred dollars.
8. "It is a sign of weakness if I reduce my price!"
Nationwide, 12.9 percent of sellers reduce the price of their house at least once. While no homeowner wants to drop their price, if nearby comps are priced lower, you’re not receiving offers, and you are having few showings, it is time to adjust.
These are just a few of the myths to ignore when pricing your home. If you have questions about selling your home, contact Greg W. Skinner. Greg understands that buying or selling a home is more than just a transaction. Greg takes pride in the relationships he builds while working relentlessly on his clients behalf selling commercial, industrial and high-quality residential properties.
Today’s buyers and sellers need a trusted resource to guide them through the complex world of real estate. C. Greg Skinner has extensive knowledge of the Central Ohio market and can help you with all of your real estate needs.