Remember what it was like when you first bought your single family home?
You probably wanted the best house in the location of your dreams for the lowest price possible.
Buyers today aren’t much different than how you were back then: they look for competitively priced homes in their price range. You need to find the sweet spot when you price yours, because without the right price tag, you could lose thousands of dollars or you could not make the sale at all.
According to our Top Agent Insights Survey, 51% of real estate agents selected “Pricing a Home for Sale” as the biggest place sellers can make an error. In addition, the National Association of Realtors found that 37% of sellers had to reduce the list price in order to sell their property.
“I had a friend who listed a house at $449,000. Should have been about $429,000. He did not take my advice! He’s actually a REALTOR®. He kept asking my opinion of his price, and I told him. He was at $449,000 and I told him he should have been at $425,000-$430,000. He waited about 6 months, moved out of state and had to have the house professionally cleaned again.
By pricing it too high, in that particular case, he is now at four and a quarter.
So, he went too high to start with and sometimes when people go too high, they end up dropping it more than they would have if they would have priced it right the first time.
If he would have taken my advice 8 months ago, he would have sold it and not had to make payments for 8 months. He might have even gotten higher than that. You never know.
Again, when you go too high on the price, then the property could just sit there and become stale. Then you have buyers do the same thing. They want to lowball because they see it as a stale property.”
You want to get the most for your property, but you have to remember that your real estate agent wants you to make the most as well. Dale’s situation alone should prove that overpricing the home does not make the home seem more “valuable” to buyers, nor will it get you more in the long run.
You should not, however, price the home too low either, because you could lose money that way as well. The bullseye of pricing your home to sell is only as elusive as you make it.
We put together a short series of exercises that mimic the way your real estate agent figures out the price of your home.
Our exercises are meant to teach you to understand why the agent lists your single family home at the price point he does, and to recognize if the agent is quoting you a higher (or lower) price than is reasonable for your neighborhood.