When it comes to selling your home, setting the right asking price from the get-go is key. If the price is set too high, the place will stagnate on the market and force you into price cuts. If the price is set it too low, then money that could’ve gone into your pocket, you’re kissing goodbye. So how can you get an accurate idea of your property's value? In our experience, sellers make 4 common pricing mistakes.
The Price Paid
The most common mistake sellers make is to base the price on how much they paid. Even if it’s an uncertain market, homeowners expect to make a big profit when they sell. The harsh reality is that buyers couldn’t care less about how much you paid. All they care about is getting the best deal possible, and if you aren’t willing to come to terms with that, they’ll take their money elsewhere.
You may argue you are overpricing with the expectation a prospective buyer will negotiate down. Our experience is this will simply deter them from even viewing your property. So pricing your property too high – thinking you’re leaving prospects with plenty of possibility to negotiate – will only serve to scare away genuine offers. Moreover, buyers who search for homes online (i.e. pretty much all of them) often search by price, meaning they might not even find an overpriced property.
Recouping Property Improvement Outlay
Have you lavished money on property improvements? Expecting to get all your money back for improvements made to the property is unrealistic. So you fitted a designer kitchen or installed a swimming pool in your back yard, and it cost you an arm and a leg. You think you can pass that whole cost along to buyers? Think again. Most remodelling and improvement projects don’t offer a return on the investment. This is why it’s a good idea to skip major cosmetic remodels if you know you'll be selling in the short to medium term. This is particularly true if you’ve got outlandish or excessive tastes potential buyers might not share.
Neighbour's House Price
Just because your neighbour is asking a specific price for their property, doesn’t automatically mean it will realise that price. Perhaps your neighbour may not really need to sell and might be less motivated. Such properties may sit on the market for quite a while. A much better yardstick to use if you want to sell your home, is to look at the prices on recently closed sales in your area. Invest some time researching local listings to see how your home compares. Understanding the positives and negatives of your house are important to pricing it correctly. Sometimes what may seem minor differences can add up to substantial discrepancies in value.
Failing to Adjust the Price
If your property generates no interest from prospective buyers then you need to take action. The likelihood is that it’s priced too high, particularly if homes in your area usually sell quite fast. Instead of making a small price cut and risking having to do it again a short time after, make one decisive price cut. Doing this will most probably attract prospective buyers because it shows you’re serious about selling. Understand that today’s buyers are well-informed, so if they sense they’re getting a deal, they’re likely to acknowledge it.