By Lawrance Morrissey
Perhaps the single most important factor in selling your home is pricing it correctly. And that's probably the single biggest mistake people make. Sellers often price their homes too high to start with thinking "I'll start high because I can always come down in price." This is a big mistake no matter how you sell.
Always try to price your property competitively from the beginning. If you overprice initially you may make less when it is finally sold than you would have been offered earlier if the price had been competitive. The reasons for this are simple: You'll get fewer showings and a property will not sell quickly if it is not offered at a competitive price. The most enthusiasm for a newly offered property is in the beginning. After the first month or so, prospective buyers lose their enthusiasm and begin to make negative statements about it being overpriced. Prospects often know how long a property has been offered for sale and as time goes by, they may assume something is wrong with the property. Buyers who know how long a property has been for sale, assume the seller must be desperate and will almost always make low offers. Most buyers are market smart. They know the market. They know how many homes are in their price range and have probably shopped around. Buyers often know the market better than sellers.
Be wary of agents that boast they can sell your house for more money. Regardless of who sells your home, your house is worth what it's worth. The problem with realtors is that some tell you what they think you want to hear. Wouldn't most people comparing realtors hire the one who told them they could sell at the highest price? Then when sellers aren't getting enough showings or interest, they suggest lowering the price or even better for them, they'll wait for you to suggest lowering your price.
We're honest and realistic with potential clients. Why? We're not commission-based and don't gain anything from an inflated price. We may only be in our fourth year in business, but we know that successful clients bring us more business through referrals. Selling in any market and however you do so, is hard work. High prices delay sales and we think you deserve better.
There are many factors that influence your asking price including timing, location, features, condition and the market in your area.
We at the FSBO store will help you price your home by completing a Comparative Market Analysis. This compares your home to other similar homes in the area that have sold, are pending or are for sale. Visiting open houses in your area will also help you price your home, but you need to remember | that the prices of homes that are for sale are not necessarily the prices that they will sell for.
A major advantage of selling by owner is that you can afford to be more price-competitive than agent-listed properties. You can sell by owner slightly lower and still net more when you sell. Buyers are more likely to make a reasonable offer on a reasonably priced home. They are also likely to make no offer at all on an overpriced home.
Most sellers do not get their home professionally appraised, however it's a great idea that we recommend. A professionally prepared appraisal will cost approximately $300.00. An independent appraisal can give you confidence in and justify your asking price to buyers. Appraisals are done for many reasons. You'll be seeking a fair market value appraisal. Market value is the price a property will most likely obtain in an open and competitive market. By getting an independent appraisal, you will have the peace of mind that your property is fairly priced, and will be able to speak confidently to buyers, and know that there is nothing to fear when the lender orders an appraisal to determine the loan amount for your buyers.
Glen Timmons, an appraiser with Frieje & Frieje, says that the biggest mistake people make when pricing their home is relying on opinions and not experts. For instance, someone will check with the brother of a friend who is a realtor and will get an amount which is not much better than a guess. Some real estate professionals are more educated than others but most are not nearly as good as appraisers who have been trained and have years of experience pricing property. They'll do the in-depth research needed. Here at the For Sale By Owner Store, we provide a CMA for clients however we advise that pricing your home is best left to an appraiser no matter how you sell.
Many buyers have had an appraisal done for a refinance and are surprised when they can't sell their homes for the amount the lender appraised their property for. These tend to be higher than fair market value appraisals. Remember it's in the lenders best interest for you to increase your debt to them. That's their business!
Another common misconception people have is that the cost of improvements they have made to a home should be recouped when they sell. Although we wish this were true, it is usually not! In fact, if you're not keeping your home updated and on par with the homes around you, you're going to have trouble selling in this market at all unless it's a real bargain for the neighborhood. There's simply a lot of homes on the market to choose from right now. Unfortunately for sellers, the laws of supply and demand hold true for the real estate market as they do in virtually all consumer items. |
