Nobody wants to lose money when selling a house; the point is to make a profit, but too many sellers make these costly mistakes when pricing their home. They do have an ultimate say as to the price point of their home, but sometimes agreed can get in the way costing them much more in the end. Here are five costly mistakes many sellers make when pricing their home.
#1. Pricing the home based on the profit you need.
We understand that pricing the home means that you need to get a certain amount out of it. But often times, the monetary value you think you might get from your home overshadows the reality of whether or not you actually get it. There should be no correlation between your home's value in the money you need even though it can play of part, especially if your equity is quite close to the home's value. Try to keep that figure out of the pricing process until the end.
#2.Leaving too much room to negotiate.
This is a common mistake that many sellers make. They think they can price the home high and negotiate down if necessary. The problem is the people that can actually afford your home are not looking for your home. For instance: if buyers are looking to purchase a home for $250,000, they might be looking between $220,000 and $260,000. If your home is valued at $250,000 but you've priced it at $280,000, that buyer will never see it because they don't think the seller will come down. You've lost a valuable buyer because you price it too high thinking that you can come down if necessary.
#3. Putting too much value on repairs or upgrades.
I told a lot of my clients that they don't need to do a ton of work on the home until the buyer requests it. There are some items that need to be addressed such as eyesores, repairs, replacements of dysfunctional appliances or materials, but upgrading to the top-of-the-line appliances, a brand-new roof (when the home may not have needed it) or brand-new carpet, may not add as much value as you think. Ask your real estate agent about the repairs or replacements that you should be worried about that can offer you 100% of your investment upon return.
#4. Not listening to feedback.
This is a big one when it comes to sellers in the property not selling. If you're not listening to the feedback from real estate agents and potential buyers, you could be ignoring some of the main reasons your home is not selling. If you've had at least 10 showings on the home and you have not received an offer, you may want to reevaluate the price. If nearly every prospective buyer says that the home is priced too high or there are other issues that need to be addressed, you should definitely take that into consideration. The goal is to sell the house, not be stubborn and sit on the market for months.
#5. Not being objective.
Nearly 80% of homebuyers look online before viewing a home or contacting a real estate agent. If you don't know what your buyers are looking at, it's very difficult if not impossible to compete. If you're not pricing your home correctly, being objective to your home's design, layout and presentation, you'll probably miss a potential buyer. Look at your home the way a buyer would; is it priced correctly as compared to similar properties in the area? Is the layout, design, upgrades or repairs compete?
Your real estate agent can answer all of these questions and help you make the right decision when it comes to pricing your home, but you also have to listen. And experienced real estate seller will understand the market, local dynamics and what buyers really want. Taking their advice and listening will help get your home sold a lot quicker.