Home Pricing Mistakes That Can Delay Your Property's Sale
Posted on: 15 December 2016
When you have decided to sell your house, how do you decide how much to sell it for? Pricing real estate isn't easy, which is why you can easily make these three mistakes:
Chasing the Market
This phrase refers to the practice of making incremental price drops every time you feel your house isn't attracting the attention it deserves. You are likely to do this if you believe that your property's high price is the only thing keeping it from getting sold. So you may start out at $275,000, reduce it to $250,000 after some time and then $245, 000 after a while.
Unfortunately, chasing the market may make your property harder to sell instead of boosting its appeal. Potential buyers will start wondering what's wrong with your house that is making you reduce its price. Others may adopt a wait-and-see attitude with the hope that you will reduce the price further.
Avoiding Comparative Market Analysis
Your house isn't worth what you think it is, what the neighbors think it is worth, or what you paid for it. The only way to know how much your house can sell for is to conduct research. Otherwise, you may rely on your emotions and set a very high price (for example if you inherited the house and have an emotional attachment to it) or a very low price if you don't care much for the property. A comparative market analysis (CMA) will tell you these things:
- How much similar houses are selling in the neighborhood
- Whether your house has any unique selling points, such as a flooring material that many people find desirable
- Whether you are selling in a buyer's or seller's market
Using the CMA will take the guesswork and hearsay out of the pricing process and help you come up with a competitive and marketable price for the property.
Starting Too Low or Too High
This one has a simple explanation. Setting the price too low has two major drawbacks; the first one is that you will definitely end up with less money than the house is worth. Don't forget that many people expect to negotiate for properties, so your already low price may go down further. Secondly, you will be locking out potential customers that think something must be wrong with your house due to its uncharacteristically low price. At the same time, an overpriced property will lock out the demographic who are interested in houses similar to yours; especially if they have don't some market research (and it's wise to assume that they have).
One of the advantages of using a real estate agent right from the beginning of the sales process is that they will help you with the pricing too. Of course, the agent can't tell you exactly how much to sell your house for, but at the very least, they will help you avoid the above (and other) mistakes.
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