Every seller wants to realize as much money as possible when selling his or her home. The natural inclination is to price the home a little higher, thinking you can always come down in the future.
But listing your home in London Ontario price that is too high frequently nets the seller LESS money than an original price at market value. Why is this? Because, when most people looking for homes in your price range, they will reject your home in favour of other homes in a reasonable price range.
Buyers know prices, they may have already been in 6-10 homes, they can compare and in the long run, the buyer will decide if your home is priced right! No offers on your house after 30 days, what do you think the reason was?
So you price your home high, thinking you can come down. Problem is, the agent and buyer community don’t look at it that way. They see it as an overpriced property. After a few months go by, a few open houses, signs, agent tour s and not a nibble.
Finally, in order to attract attention back to your home, you’ve reduced your home price more than you ever thought you would, and you’re now netting much less than if you had priced it correctly in the beginning.
And think about this: The money you lost is not just the lower sales price, but all the extra interest you paid on your mortgage…all the extra property taxes and other carrying costs that accrue while your home is waiting to sell. I’ve seen it happen time and again!
I call it chasing the market or to be subtle, like falling off a cliff in the night, you know you are going to hit the bottom but you don’t know when!
Real Estate Fact: The Seller Is Solely Responsible For How Much, and How Quickly Their Home Sells!
Overpricing almost always increases time to sell, and adds to your carrying costs.
The most common mistakes sellers make when choosing a price.
- Not choosing the right price when a property is first listed. In other words, thinking “We can always come down”.
- Putting the property on the market at an unrealistic price. A property must be priced on a comparative basis to the other properties which are similar. (I should add, everyone thinks their home is different but buyers and their agent doesn’t think so.)
- Not relating marketing time to price. Generally, the quicker you want to sell, the less you should be willing to take.
- Thinking that buyers aren’t comparing your home, on a dollar-for-dollar basis, with every other home on the market
Some of the ‘talks’ I have with my clients cover the following:
- How to set the asking price to maximize exposure and a profitable sale.
- How do you really define and compare market value between homes?
- How the total market performance may affect your home sale – positive or negative.
- How to handle buyers during any showing to help yield the highest price.
Once you understand these important issues, you’ll know how to price and sell your home for the fastest, most profitable sale.
Also, with this information, you’ll never pay too much for any home you buy for the rest of your life.