It may seem counter-intuitive, yet one of the most costly mistakes I’ve seen in the real estate business, is when sellers insist on setting a price for their home that is significantly higher than the market will bear.
There’s no question that we have been experiencing a difficult housing market for quite some time and the uncertainty of the past few years has made it very challenging. So how can you price your home correctly so that it will move faster than your neighbor’s property and get the highest selling price? Below are my five "price to sell" guidelines:
- Hire a broker who specializes in your town. The market is fluid and you need an experienced listing broker to educate you about current market conditions and how they may impact your home’s selling price. Buyer’s brokers take many factors into account: town assessments, square footage, condition, comps, etc. and will tell you exactly why your house should be priced in a certain range. Keep in mind that sale prices often need to appraise out at full value for buyer financing.
- Even if you have time on your side, don’t go for a higher price than your home is worth. Sellers who say that they want to “see how it plays out” not only run the risk of shrinking the potential buyer pool but removing themselves from consideration altogether. There is a direct correlation to days on market and selling prices. Traditionally, the longer a house is on the market, the lower the selling price. If you discover that your house is not being offered in the target price range after testing the market, do not be afraid to adjust your asking price. Don’t let other brokers use your house to sell another house.
- Negotiate, but don’t over-reach. As a sale comes to a close, both the buyer and seller want to feel that they received a fair deal. By all means, negotiate but don’t get overly aggressive once you have an interested buyer or you might lose the sale. The negotiating skills of your broker are paramount in a buyer’s market.
- Market your property online and check your competition. Take a look at online listings in your area so you have a feel for pricing. Visit open houses to better understand the competition. Look at what’s moving and what’s not and be sure that your property has a visible, searchable online presence and that you have highlighted key selling features. Buyers search by price categories. Don’t position your home in the wrong price category or you will eliminate or reduce the buyer exposure for your house.
- Be realistic. Do not price your house based upon what you want, but on what the market will support. Although you may have recently invested $50,000 in a brand new kitchen, it doesn’t mean that you can add the full value to your listing price.
Compare your house with the homes that have successful results and not with the inventory that has not sold. Understand absorption rates, the available inventory competing in your price range as compared to the number of houses that have sold in that price range. Supply and demand impact both the asking and selling price of your house.
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Studies have shown that the first two weeks a home is listed is the most critical to moving the property. Price your home too high and you run the risk of losing the right buyer. The bottom line is that buyers are motivated by value. Price, price, price to sell!
Amy Mizner, founder and principal of Benoit Mizner Simon & Co. is a top producing real estate agent in Weston. She brings an award-winning background in advertising and marketing to her new company with offices in Weston and Wellesley. Contact Amy at amy@benoitmiznersimon.com or at 617-851-4909
