Sell Your House Fast Charleston SC: Pricing Mistakes
In today’s post I continue to look at mistakes sellers make when pricing their home, and what happens when you overprice your home.
This is a critical mistake.
What homes are listed for is irrelevant for the most part.
The current list price could be one the seller is dead set on and the agent doesn’t know any better.
Or worse, the agent knows better and didn’t say anything for fear of losing the listing, and the agent simply “bought the listing”.
Don’t just listen to what your neighbors have their house listed for.
As Bill Gassett at MaxRealEstateExposure.com blog says:
“Sold properties are what dictate market value. You always want to look at what similar properties are selling for not your neighbors unrealistic expectations for their own home.
The other thing to keep in mind is the neighbor could change their price at a moments notice. Pricing your home based on your neighbors is a rookie mistake.”
Homes under contract (Contingent and Pending Sales) are worth looking into, but you must know that they will only show the list price, and not the actual price the home is under contract for–we don’t know that number until after it closes.
However, these home prices can still be useful to see what price brought a contract.
The only way currently listed home prices matter is simply to see what you will be competing against. If a home has been listed for a long time (longer than the current Average DOM), then you can bet that it is priced too high.
You can also see where similar homes are priced at and see if they fall in line with the market.
It is not a bad idea to come in below the competition, even if they are not overpriced. However, doing this research to determine a fair market price is not easy, nor is it an exact science.
They figure it is ok to be overpriced, that they will sell eventually. But this is a trap.
An overpriced listing will still be a long, drawn out listing that will sell for less.
Your house will have the stigma of a “stale listing”, and be that much more difficult to sell.
If you aren’t ready to sell just yet, then the best advice is to simply wait until you are ready to sell. Then, price it right from the start.
Tricia Bredahl says in her article “4 Home Sellers Pricing Mistakes” on her www.MoveToSedonaAz.com blog:
“It is not uncommon for a seller to say, “We are in no hurry to sell, so we want to list our home for $200,000, even though you suggest and your market analysis shows that the market value is approximately $175,000.”
While a difficult thing to do, a great real estate agent will “walk-away” from this listing. Being in no hurry to sell, does not mean over pricing a home is a good idea.
If a seller is not in a hurry, the best option will be to wait until the seller is in a position to price their home correctly!”
Chasing The Market (pt 2)
Here is a rundown of what happens when your home is overpriced:
1) Homes you are competing against are more attractive to buyers simply by being priced lower. In fact, you are likely invisible to your target buying audience.
Blanche Evans explains in her RealtyTimes.com article “Why Sellers Overprice Their Home”:
The right buyer for your home might not know your home exists if they use price perimeters to search for a home.
That means a typical search between $175,000 and $200,000 won’t include your home priced at $205,000.
Buyers tend to search in increments depending on scale – $10,000 increments for $100,000 homes and $100,000 increments for million-dollar homes.
Pricing just over a logical range end point like at $255,000 or $505,000 will exclude that home from some search results, say experts”
Your home ends up competing with homes at a similar price point. However, your home can’t compete because it simply does not belong there. The homes are not comparable, and buyers in the higher range will see that your home does not measure up to the available inventory.
2) This leaves you with a stagnate listing, otherwise known as a “stale listing”. Even if you get showings on your house, you will not get offers. About this time the first price drop occurs.
4) You spend more time on the market, frustrated that you haven’t sold. You will probably have a couple more price drops until you get back into your market.
Now that the price is dropping, buyers are again thinking “the way they keep dropping the price, there must really be something wrong with that house”.
As opposed to price drops, you can simply wait for the market to catch up to you. And wait. And wait.
If you are thinking of selling your home in Charleston SC, then bee sure to visit my Pam Marshall Realtor website.
Stay tuned for the final installment of my “Sell Your House Fast Charleston SC: Seller Mistakes To Avoid” tomorrow.