Real Estate is like a gamble. The only difference is, you can choose to be a winner if you keep the pricing appropriate. The offer price of the home you are willing to sell is the main factor. The other factors are important too, but if the home pricing is right, half the battle is over. Possibly, more than half.

💻 Research before Making a Final Home Pricing

Home pricing can’t be done right without knowing the numbers.

Suppose you price the home you wish to sell a bit above market value. Most prospective buyers will not even engage with you. Everyone has a budget in mind when they are out looking for a home. If in the 3 Unacceptable Home Pricing Myths that Erode Equitybeginning, you give out a high price, the chances of selling the house are almost nil. Try this instead: before finalizing the home pricing, you do your research.

Compare similar properties, get to know of the market trend, and ask people around. While internet research seems to be an easy way out, it is not reliable. Internet research will not give you an estimate based on the exact location, the present condition, the upgrades, and many other such factors. The online evaluations do not take elements such as busy streets, homes that back to power lines, or other variables in your neighborhood.

Avoid Being an Unreasonable Seller

Make a sensible choice when going through the process of getting the price right straight from the get-go. Seek the professional help of a real estate agent or appraiser if needed. Make sure that you are dealing with a real estate agent who is skilled in digital and online property marketing. And, just tossing it on Zillow does not qualify as marketing. Anybody can do that.

Your home may have emotional value to you. You will always see it as a prized possession, but once you decide to sell it off, the one thing that matters far more than anything else you do is nailing the price. You might have bought it at a higher rate, did endless upgrades and repairs, but for a buyer, it must have a competitive price. The buyer will not regard for the dollars you have invested. When it comes to home prices they will constantly be comparing their options to similar properties.

Overpricing is Not a Good Idea

It can lead to many hurdles on your way to make the sale. Why not avoid all the fuss? If this was not enough, read on to know how it affects the purchase of a home.

❌ Bad Reputation

Picture it this way. You go for grocery shopping. You see a product on the racks and are attracted by it. However, you see the price and walk away. You see similar products at better prices and explore them. You still have your eye on this shiny new product which is pricey. You wait a day or two to see if any offers are asking similar amounts, but nothing of that sort happens. Some other time, you see that the same product is still lying there in abundance and no one is buying it because it is way overpriced. You end of perceiving that product as unworthy and forget about it altogether.

When you price the home too high, this is exactly what happens. There might be prospective buyers, but they will walk away and forget about your home only because you decided to price your prized possession way too high compared to similar homes.

a man is thinking about home pricingThink Like a Buyer

Even if you come across someone who is willing to shell out the money you have asked for, a doubt will arise within them for sure. They will certainly think something is wrong with the home as there are no other offers? Sure, your home might be beautiful, but there has to be something wrong for lack of competition to buy it, right? Think like a buyer for a moment, and you will get the hold of it.

The stigma of a high price tag is lingering and detrimental to the goal of fetching top dollar for the property. Buyers will label you as the one who prices way too high. So, why risk it? Just because you think a buyer will like your home and be ready to pay the high price, doesn’t mean they will. A buyer, especially the ones with little or no knowledge of the real estate trends, will hire a real estate agent.

Buyers Have Different Ideas

However, you also need to understand that not every buyer has the same tastes and preferences. The prospective buyers who visit the property will have their ideas of upgrades. So, never expect to recover every penny you spent on the home. Your home pricing must be reasonable and competitive.

Try to price your home in line with the market trend to give a competitive price. This way you get the house sold for top market value quickly.

A Real Estate Agent

They know the real estate market and has the tools to research values. If you set a higher price, the agent will not even consider your property. It will be invisible to them. Instead, you should place a realistic market price, and not an overly attached seller. You will reap success sooner by pricing it right straight out of the gate!

Do not even think of putting up a high price at the beginning and a lower later. It’s one of the biggest blunders one can do. The real value of the home you are trying to sell is perceived to be the one that you put out first. You could say ‘the first impression is the last impression’ when it comes to real estate. The value perceived is the one that is put up first when you list your home on the market. A fresh entry in the listings always attracts more potential buyers.

Make a Right Price

That is if you price it right. You do not want to ruin that. The competition for buyers is high. Your price, no matter how appealing your home is, has everything to do with selling your house or not. It has everything to do with selling your home in days versus months.

By making unrealistic reductions, like going from a higher value to a lower one – even from the average market price – you only erode your chances. You, as a seller, become desperate in the eyes of an astute buyer. They will perceive you, someone, to avoid or someone to make super low offers to based on your drastic price reductions.

Yes, we understand. The reason why you ask for a high price is that you would like to cash out with more money in your wallet. Everyone wants that. All the upgrades and repairs, or additions that you might have done in the past years are only as valuable as the market perceives.

🕴 Learn Some Marketing Tactics

a man is having a parasailing as part of his selling tacticsSome buyers who are genuinely interested, become willing to pay a little higher price to secure the deal. It is one of the best marketing tactics, on the planet. You need not fear that your home will sell for less than market value. People who see something they want will fight for the right to have it if someone else gets in their way. It’s especially true for real estate property. We know that when there is more than one offer on the home that we can do things to buyers that we cannot do otherwise. Bluntly said, if someone is emotionally vested in your home we can send multiple counter-offers to all interested buyers and bid the sale up, up, up and away.

Standstill Situation Ultimately Leads to Failure

Price the home too high and you will be giving away the chances of multiple offerings. An overpriced property will likely not see one offer, let alone numerous offers. Multiple offers are advantageous in so many ways. If you offer a slightly lower price than the trending market price, chances are you will get many offers. Once the news is spread about the affordable pricing of your property, buyers will rush in to seal the deal with you. In the desperation to seal the deal, you might receive offers above list price too. This is precisely why it is important to price the home right straight away.

📜 The High Cost of Home Pricing

money is stuck in ceiling referring the high cost of home pricingNothing can overcome a high price. First of all, a genuine real estate agent will straightforwardly tell you if you have overpriced the property. If they do not, they may be saying what you want to hear just to “{get the listing” and ask for price reductions later. All they want is to have their board posted outside your property, and your home listed on their website. Both of which are great marketing techniques. Marketing techniques for them, not you. After all, if someone sees a board outside a house, they will connect with the real estate agent. If not yours, the agent will guide the prospective buyer to other homes that have a competitive price.

If you advertise a higher price, the chances of selling it above market value . are extremely unlikely. The likelihood of taking what might seem like forever to sell the home at a drastically reduced price is very probable. Higher the time your home is listed, higher the chances are of it killing the deal. Shorter the time from listing to selling, the better it is. Time is the key. And you will be only wasting precious time if you price the home is high. Selling the listed home in the initial few days or weeks is the best. Beyond that, as time passes, it becomes difficult to sell off.

The Major Risk Here Is the Market Trend

What if the economy takes a downfall? Your overpriced home will not even sell off for peanuts! The best time to make a sale is the time you decide to sell it. The longer you wait, the chances of having extreme loss are also high.

Lack of potential buyers and an extend stay on the listings but is a myth that placing a higher price for a property will yield a higher selling price. It is the complete opposite. The higher you go above the market’s average price, the higher the negotiations you will have to face. Why go through the hassle?

In this era of internet, you will still fail to catch eyes if your home pricing is high. If you have ever shopped online, you will understand this. Picture this, you go online and are looking for a particular thing, you end up using the filters. You might have also used the price filter wherein you can set an upper limit. Similarly, if your home is listed on a real estate website, it will also have the price filter. Now, if your home pricing is high, the chances of your home not getting unnoticed are uncomfortably high.

For instance, if the market trend of buyers suggests a budget of $350,000 to $400,000, and you have overpriced your home at $430,000. You get automatically filtered out of the search results! Most buyers will not even come to know that such property is up for sale. You are only damaging your chances of being viewed and considered by setting out a higher price.

List out A Price that Comes in The Range of Comparable Data of Sales

This way, you will attract many potential buyers online as well. By listing a smart price, you might also be the fastest sale. Try helpful tips in price your home for sale/ set the asking price right from the start.

There is a direct relationship between how your house is priced and how many buyers show interest. You may also want to consider boosting your asking price to get the selling price you are seeking. 

The idea is to sell quickly at a reasonable price rather than to ask for a higher rate and stay listed longer. You lose out on the value if you stay listed for one property to long.

🏷 Make the Sale While the Listing Is New

One cannot emphasize enough on the fact that the longer your home is listed for sale, the less its worth is. Put yourself in the buyer’s shoes. There are two homes on sale in the same neighborhood – Home A and Home B. Home A has been on the listings for more than five months. The features are decent, but since the property is on sale for such a long time, the upgrades needed are more.

Also, the price asked by the seller is higher than the current market trend. Home B is in the same neighborhood. It has recently come up for sale. The price set by the seller is pretty competitive and matches the current market trend. Also, since it got listed just recently, the features of the house are of recent times as well. Which home will you prefer to own? Of course, Home B. Any practical buyer will go for Home B. Home A doesn’t even get a whiff.

Do you want to be the seller of Home A?

Obviously, not. The wise thing to do is to sell off at a competitive price matching the market trend in the initial days of listing the property. Setting up a high home price will give you a tag of an unrealistic seller. And no buyer wants to deal with an unrealistic seller.

Do you know the appraisers can kill your deal too? Suppose you find a buyer who is willing to pay you the price you have asked. The buyer loves your home and is ready to buy at the higher price as well because they have fallen in love with the property. But, this is not it. There comes another hurdle – the appraisal. If the buyer will be taking a loan to pay you, there is no way he will be able to buy your overpriced property.

Any financial institution evaluates the property it is about to lend money on. Once a bank demands an appraisal, the appraiser will give out the value by the current market trend. No matter how beautiful and perfect your home is, and how desperate and willing the buyer is to buy it – it all comes down to appraisal.

Low Appraisal Will Lead To

Once the appraiser gives the market value to the bank, the bank will immediately notice the vast difference in the price. A low appraisal will often lead to the bank rejecting the approval. So, from an almost sale you made to back to the struggle of selling – it all happens in the blink of an eye. Lets say you manage to find a buyer who is so in love with your house that they are willing to buy regardless of how you price the home. You still have to go throught the appraisal process. The buck typically stops right there as most buyers are unwilling to pay more than appraised value.

Overpricing extends the time of your listing, yet again. Also, once the news of application rejection spreads in the market, potential buyers are going to avoid your home. So, it all comes to realistic and adequate home pricing.The better you price the property, the lesser time it will spend on the listings.

👨‍⚖️ Be Real

If your ultimate goal is to sell the home, then be real in your home pricing. Pricing it too high will lead to the problems mentioned above. And you do not want that to happen. Do your research and reach out to us if you’re going to want to nail the best price for your home.

Unrealistic Pricing is the Biggest Mistake

There are many homes listed in the market that are not selling because of similar reasons. While the owners can give other unacceptable excuses, the real cause always turns out to be unrealistic pricing. Having unrealistic pricing is the biggest mistake one can doIt acts as a repulsive. No matter how much you spend on marketing, it all comes down to home pricing. You may have billboards and advertisements all over the city, but unless it’s a reasonable price, no one will even take a glance at your listed home.

If you make this mistake of overpricing, you will ultimately face a significant loss. After months of trying and unable to sell off, you will bring down the price. Now, even if you bring it down to the market price, you likely suffer some loss due to the buyers who passed on your home for others.
The idea is to have a concrete plan. Plan well in advance to sell off the property. If you fail to plan, and there is pressure to pay mortgages, you will end up selling the property at a lower price. This price may be lower than the market price as well. Do you want that to happen? Of course not. So, why not be safe now? By playing safe and having realistic home pricing and expectations, you will yield the highest market value.

✍ Conclusion

You cannot just try to sell a property at a higher rate. There is no such thing as a test market in the real estate industry. If you want to take a chance to sell the home at a higher price, you might end up “paying the price” yourself. An above market price tag can be very damaging. If you think a potential buyer will come along and overpay – it is time to be practical.

No one will go for unrealistic pricing in the first place. Every buyer has an idea of how much their budget is, even if they have to take a loan. There is a limit to negotiate and bargain. If the buyer gets a hint that the price is way out of whack, he might not even try. The trust factor gets affected from the buyer’s point of view. No one wants to deal with someone who has unrealistic expectations.

Price it to sell quickly. The longer you are listed, the higher the depreciation is of the property.

🤓Related Reading

View All Selling Posts
Share