Determining how much to list your home for is a delicate dance. Of course you want to ask as much as possible, and be fairly compensated for what your home is worth. But there are some big risks involved in overpricing your house, and some big advantages in getting your price right from the beginning.
So how do you do that?
You work with an experienced realtor who knows the area, knows the market, and is going to tell you what you need to do to sell your house, fast, instead of what you want to hear.
“In the world of real estate, there’s always talk about how long homes have been on the market and what the competition looks like,” says Brinkoetter Designated Managing Broker/Owner Tom Brinkoetter. “But the numbers and statistics only tell part of the story. What matters is that you get your listing price right, from the very beginning, and that you work with an experienced professional who’s going to advise you well.”
Overpricing your home can immediately eliminate groups of potential buyers. Buyers who can’t afford your asking price may not even bother to view your home. Even if they are interested, lenders may not approve a loan if the appraisal is lower than the contract price.
And because the most activity on a new listing happens within the first couple of weeks, it’s important to have your price point correct from the moment it hits the market.
Another risk in pricing your home too high is that it will grow “stale” the longer it sits with a For Sale sign in the yard. The market will begin to assume there must be something wrong with your home. Sellers who aren’t in a hurry sometimes feel that gives them the freedom to overprice their home, knowing they can eventually come down in price. This is a damaging mistake, and the right realtor will understand the risk of a negative stigma associated with a home that just sits. If you aren’t in a hurry, the best option will be to wait and list when you’re ready to price your home correctly.
Another common misconception tells us that sellers should list for more than their real estate agent recommends in order to leave room for negotiating. This can majorly backfire. Today’s buyers are knowledgable, informed, and probably working with an agent of their own who will be advising them as to your home’s worth. Listing your home to sell sends the message that you are also informed, have been well-advised, and confident in the quality of your property.
Says Brinkoetter, “I tell all my agents, if a home hasn’t sold in 30 days, it’s most likely to do with the listing price. That’s when it’s important to be working with a realtor who has a strong professional network; a collection of colleagues who can brainstorm about adjustments that need to be made to the listing price, and any other issues at play.”
So how do you find the sweet spot? You don’t. You let your realtor do it for you.
A professional real estate agent will be able to help you determine a fair asking price by conducting a through analysis of the current market, an evaluation of your home’s location, size and condition, and the competition landscape.
Says Brinkoetter, “Without question, price is your most important sales tool in real estate. And arriving at the right price is a question of experience, knowledge, and good ol’fashioned instinct.”