Pricing your home Accurately is CRUCIAL
Determining an accurate price for your home is a science. It isn’t just looking at what your neighbor’s house sold for a couple of years ago and adjusting for inflation. Current market conditions include housing affordability (which includes current interest rates even if you have a cash buyer), whether listing inventory is up or down (buyer’s or seller’s market), and on and on.
In addition, the comparables (comps) themselves have to be carefully evaluated. You can’t use a two story as a comp for a ranch/single story. The square footage numbers are skewed. You shouldn’t use comps more than 6 months old if possible. Certain upgrades can be adjusted for, but not the way many would think. A swimming pool doesn’t necessarily bring a lot more value, for example.
In the end, the more accurate we are up front, the quicker and smoother everything afterwards will go. As Abraham Lincoln once said”
“If I had 8 hours to chop down a tree, I’d spend 6 sharpening my axe”
If priced right initially, offers come more quickly and higher, negotiations go smoother and the eventual appraisal will confirm the price and the loan will not be a problem.
If you’ve considered pricing your home higher to leave room to “negotiate”, you’re shooting yourself in the foot for two reasons:
First – There are buyers out there RIGHT NOW looking for a home like yours and haven’t found it yet. Your best chance of getting the highest price for your home is in the first couple of weeks when the most buyers are going to look at it. If you price it too high they will likely not offer on it. WHY?
Because to make an offer on a home, the buyer has to imagine themselves in it. They have to mentally commit to it… in case you actually ACCEPT their offer. IF you have it priced high, you’ll make them feel as if their chances of getting it at a fair price will be low… so they won’t want to take a chance. They’ll wait until you lower the price.
Second, when you have a home on the market for more than 30 days, buyers and other agents begin to think there’s something wrong with it. if they ever do get around to looking at it, it will be with an initial negative impression and the mentality that they WILL offer less IF they offer at all… even if you reduce the price to what it should’ve been in the first place.
Most homes that aren’t priced right in the beginning end up selling for less and take a lot longer to sell.