Pricing is a critical element in offering a home for sale, and unfortunately it’s often done wrong. Sometimes that’s the agent’s fault, and sometimes it’s the homeowner’s.
We’ll start with the agent. The sad truth is that some agents try to “buy listings” by promising homeowners unrealistic prices. They say they can get a higher price than anyone else can… which is nonsense. The market determines the price.
The only way to price a home correctly is to first compare it honestly with recent sales of homes that are very similar in size, location, amenities, and condition. Then, because the market is constantly changing, it needs to be compared to homes currently for sale. In other words, compare it to the competition.
Over pricing a home can create a greater loss for a homeowner than under-pricing it, for several reasons:
Buyers who can afford a home in your proper price range never see it, because MLS searches won’t show it. (Buyers looking in the $250,000 to $300,000 range never see homes listed at $309,000!)
[pullquote_left]It doesn’t matter what the agent or seller thinks or believes, “The Market Always Determines The Price”[/pullquote_left]Buyers who can afford homes at your price will reject it
The house becomes “stale on the market” and savvy buyers who ask how long a home as been for sale may reject it without ever viewing, believing that “something must be wrong with it.”
The result: The home stays on the market too long, forcing the sellers to continue making payments while their future plans are delayed. Often, in order to sell a “stale” listing, the price must be dropped below its proper price.
Agents aren’t always the only ones at fault. Sometimes homeowners insist on listing at the wrong price, and inexperienced or insecure agents will agree. A really top agent will not, because he or she will know that an over priced listing will cost both time and marketing dollars – and won’t result in a sale.
The online MLS market analysis tool is a great starting point. But a true market analysis must be done by an agent who has seen your home – knows the local market and the homes he or she will use for comparison.
If you’d like to know what your home is really worth in today’s market, give me a call at 208.720.6888. I’ll be happy to prepare a true market analysis for you.
As you’ll read in my special reports, the three elements of pricing, presentation, and marketing carry equal weight. A successful sale hinges on all three being done correctly, and that means both you and your agent must make a greater effort today than in years past.