The Benefits of Pricing your Home Correctly
Why is it that we need to price your home correctly?
You would think it would be easy to come up with a perfect price for a home that will be going on the market for sale. For a REALTOR®, its somewhat straight-forward. Real estate markets fluctuate up and down. No one can be assured of a certain selling price in advance. A REALTOR® will do a Comparative Market Analysis (CMA) and come up with a price that will hopefully bring the buyers. The price is usually a bit higher than fair market price (room for negotiating), and is backed by evidence that makes perfect sense why that house is the price it is.
Buyers these days are very savvy. On their own, with the Internet, or with an agent, after visiting a bunch of homes, they know what a house price should be. They get a feel for the value of what you are getting, and the price range it should be in. Many times I’ve been with buyers and right away after walking into a place that is over priced, I get the high-eye-browed look, “what are these sellers thinking?”
What sellers are usually thinking is:
- I have to re-coup my money that I put into renovations…
- I’ve lived in my house for years and it’s the best house around…
- My neighbour who has the exact same place, has their place up for much more then what you’re suggesting (and it’s still on the market…??????)
Sellers become emotionally attached to their home. There are many times when I present them with a suggested selling price, they feel insulted and become defensive. They’ve put their life into their home; their kids grew up there…
I do understand. However, the buyer, even if they fall in love with the place is rarely going to pay more than it’s worth. They are most times thinking, “re-sale value” and “getting their bang for their buck”. Besides, we are in a market now with more homes for sale than buyers. Buyers are taking their time picking and choosing.
Statistically speaking, homes sell at a higher price when they start at fair market value. When they are overpriced, they may still get all the buyers, however the house sits on the market waiting for an offer. After months gone by, the house price drops and then the buyers think, “what’s wrong with the place” and “I’m going to low ball the price because they must really be ready to sell and desperate.”
So, why is it that we need to price our homes correctly? To sell it quickly and get the best price possible.
