Its critical in todays market that with the amount of inventory, the credit crunch & a large number of distressed properties lowering average market price property that a house is properly priced.
Overpricing means your property stays on the market for months. With declining values, the longer it takes to sell, the less your house is worth. Don’t make the following mistakes!
1. Using the list prices of other properties
The correct list price should be based on what has sold in your neighborhood. After all, buyers will be looking at comparable solds to make an offer. If you want to receive an offer, price your property on what has sold. When you receive an offer, it must appraise for the agreed upon selling price. Appraisals are based on the last 3 months of sales – private owned, short sale & foreclosure. The buyer’s mortgage company will only loan the amount of the appraisal. Often times, the longer the house is on the market, the lower the appraisal.
2. Pricing based on what was paid for the property
What you paid for the property has no bearing on what a buyer is willing to pay. Pricing to at least “break even” is a common seller hope. Agents & sellers do not determine what a property will sell for, the market does.
3. Overestimating the value of home improvements & remodeling
In today’s market, most improvements make your home more appealing to potential buyers, but don’t usually add value. Some improvements are suited to the seller’s taste but don’t appeal to the buyer. Many buyers are looking for move-in ready homes with updated kitchens & baths but may not like light or dark cabinetry, slate or limestone, contemporary or traditional - paint & carpet are the limits of their budgets. Low cost changes such as neutral paint, tidy landscaping, clean & uncluttered appeals to buyers.
4. “Testing the Market”
Listing at a higher price for a few weeks to see what response you get is an enormous error. The 1st several weeks of a listing is the time your property will get the most attention from Real Estate agents & buyers. You will get more showings & more internet interest. Buyers waiting for new properties to come on the market will dismiss your house if they feel it is overpriced for the market or out of the price range comparable homes are in.
Overpricing means your property stays on the market for months. With declining values, the longer it takes to sell, the less your house is worth. Don’t make the following mistakes!
1. Using the list prices of other properties
The correct list price should be based on what has sold in your neighborhood. After all, buyers will be looking at comparable solds to make an offer. If you want to receive an offer, price your property on what has sold. When you receive an offer, it must appraise for the agreed upon selling price. Appraisals are based on the last 3 months of sales – private owned, short sale & foreclosure. The buyer’s mortgage company will only loan the amount of the appraisal. Often times, the longer the house is on the market, the lower the appraisal.
2. Pricing based on what was paid for the property
What you paid for the property has no bearing on what a buyer is willing to pay. Pricing to at least “break even” is a common seller hope. Agents & sellers do not determine what a property will sell for, the market does.
3. Overestimating the value of home improvements & remodeling
In today’s market, most improvements make your home more appealing to potential buyers, but don’t usually add value. Some improvements are suited to the seller’s taste but don’t appeal to the buyer. Many buyers are looking for move-in ready homes with updated kitchens & baths but may not like light or dark cabinetry, slate or limestone, contemporary or traditional - paint & carpet are the limits of their budgets. Low cost changes such as neutral paint, tidy landscaping, clean & uncluttered appeals to buyers.
4. “Testing the Market”
Listing at a higher price for a few weeks to see what response you get is an enormous error. The 1st several weeks of a listing is the time your property will get the most attention from Real Estate agents & buyers. You will get more showings & more internet interest. Buyers waiting for new properties to come on the market will dismiss your house if they feel it is overpriced for the market or out of the price range comparable homes are in.
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