The Asking Price
When it comes to selling real estate the asking price is always the main topic of conversation, whether you’re the seller or the buyer. Most people don’t realize that there is a specific process involved when determining the correct listing price, and it isn’t always what you may think.
Ultimately pricing your home comes down to a position within the existing competition – it’s what a buyer is willing to pay for you home. Let’s take a look at some common misconceptions about pricing:
Myth #1 Overpricing isn’t a big deal because I can lower my price later
Of course homeowners don’t want to leave precious money on the table. But if you plan to start with an unrealistic asking price, you likely won’t achieve the highest possible sales price for your home.
In fact, overpriced houses tend to stay on the market longer, making them more difficult to sell. And yes, you can lower the asking price but you should remember that the largest number of buyers see your home within days of it entering the market – and if you keep reducing the price, they tend to assume that something is wrong with the home. A good buyer’s agent will also keep the market time in mind when determining the offer price.
To achieve maximum exposure and interest in your home, it is essential to price your home accurately during the crucial “New Listing” period.
Myth #2 Your home is worth more now than what you paid
Every housing market is different, and real estate trends will vary. All homeowners are hoping to make a big profit when they sell. However, it’s important to understand the pricing trends in your local market. What you paid for your home and the period of time you’ve owned it don’t necessarily mean a price increase. The price actually comes down to how well you are positioned amongst the competition, and what a consumer is willing to pay today.
Myth #3 Low housing inventory means you can ask more for your home
Homes supply and demand change by location, housing type, and price. If homes in your local market are selling fast, you may be able to be more aggressive in your pricing strategy, but if you live in an area where homes sell at a slower pace, and there isn’t a lot of activity, you will be better off with a more conservative pricing strategy.
Myth #4 Remodeling and renovation costs should be added to the sale price
Renovations can add value to your home. and even help the home sell faster. However, you should not automatically assume that you will recoup all of the costs for home improvements like kitchen and bath remodels.
It’s a good idea to ask a local real estate agent to learn which renovations will add some value to your property.
If you’re considering putting your home for sale this year, remember that setting the right asking price right away is the most important factor when it comes to creating the most interest for your home.