There are many key decisions for sellers to make on their way to a successful transaction. Perhaps the most important is setting a price that will yield a fair price in a reasonable time frame. Unfortunately, there are many pitfalls that can cause sellers to end up feeling like prisoners in their own home while their property languishes on the market for weeks or even months. It’s also common for sellers to second guess their listing price if their property sells quickly.
Educate Yourself About the Market
To prepare yourself for the market, you need to start by stacking your home up against others. Often the best way of teasing this out is by looking at the ten most comparable properties to your own, and ranking them based on price. Consider factors like number of bedrooms, bathrooms, garages, square footage, and lot size, which really dictate the ballpark ranges of how your property stacks up. You can then move on to comparables such as renovations (including how recent they are) and how your property presents itself in terms of cleanliness and finishes. For this exercise to prove beneficial, however, you need to be unbiased and honest about your own home (yes, this can be difficult for many homeowners who have put blood, sweat, and tears into their residence).
Don’t Expect the Market to Correct Your Price
The bottom line is that sellers have way more information about the value of their property when it’s actually time to sell. If the property is underpriced, it will sell off the shelf very quickly. Best case scenario here is that multiple offers will help correct the price and bring it in line with its true market value. But if the property is overpriced, a few initial offers or showing requests may roll in, but will likely taper off in a flash. This can get painful for sellers, especially when the offers dry up and other comparable properties are selling.
The bottom line is that, if you have the wrong price, you can sabotage all the other efforts that have been made to attract a stable of eager buyers – photos, staging, marketing, renovations, and so on. Afterall, most buyers are lazy, which means that you have to be close to market value in order to get buyers to come and see or proceed with an offer. Buyers pick the lowest-lying fruit, and don’t want to waste their time on a prolonged visit or negotiation that could leave them empty-handed.
Understand the Pain of a Long, Drawn-Out Sale
You can’t truly understand how maddening it is to be on the market for an extended period, until you live through it. But for your own sanity, you should try. When in this position, you are forced to wake up early before work to keep your home staged and clean as a mausoleum; you deal with buyers who book showings but show up late, or don’t show up at all; you can’t invite friends over because you don’t know when someone might want to book a showing. It’s stressful. Throw kids and pets in to the equation, and it can become an all-out nightmare.
Find the Right Realtor
One of the absolute keys to making sure you hit the pricing sweet spot is to find a realtor that you trust and has a deep understanding of the market. That way you can rest assured that they will list the property based on its true value, that they have your best interests in mind, and they will work to get you the best price possible.
You need to understand that some realtors are dying for exposure. Home listings come with the coveted For Sale sign – the best type of personal advertisement a realtor could ask for! If you go with a realtor who simply values your property higher than others, you run the risk of effectively advertising for your realtor, rather than selling your home efficiently.
Beware the Dreaded Price Reduction
I’ve met with many prospective clients who decided to go with another agent who priced their property higher. These sellers have ended up back at my doorstep saying, “I should have gone with you all along – I just wasted two months!” These clients have, sadly, shot themselves in the foot. If your property has been on the market for a long time, even a re-pricing is not going to yield the kind of outcome that would have been possible with a correct initial pricing. It plants seeds out doubt in the minds of buyers, who may question the quality of the home, or want to hold out for a further reduction.
Once you have priced your home effectively, you’re ready to move on to the next steps of a successful sale.
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