Costly home selling mistakes
Choose the right real estate agent to market your home. You must rely on your agent for accurate comparative sales statistics and pricing guidance. A good agent provides the facts to help you avoid the worst mistake you can make: overpricing. Alas, not all agents are good!
The right asking price is critical to the success of your sale. Many sellers price their property incorrectly because they choose to list their property with the agent who quotes them the highest asking price. With some highly optimistic agents this may be an honest onetime mistake. Sadly, with many it is instead a common and deceptive practice which insiders call “Buying the Listing”. Do not fall into this trap of listening only to what you want to hear!
What Happens When You Price Too High?
- The wrong buyers see your property when it is new to the market and “hot”. Buyers compare price, features, location, and condition of all the homes they inspect. If yours is priced too high, it will not compare favorably with others the buyers look at. Your competition has more to offer for the money.
- Your home will not appraise at or near the asking price. Most buyers require mortgage financing and that means an appraisal by the lender. Appraisers look at similar homes in your neighborhood that have sold in the last six months. If you have a 3 bedroom mid-century, it is not equivalent to a 4 bedroom traditional. No matter how much you love your house, the appraiser will not see it with the same nostalgia.
- Your buyer can’t get a mortgage. If you price your house at $900,000 but it is worth only $800,000, banks will not lend the money for a mortgage. Even if the buyer wants to pay $900,000, he can’t complete the transaction because the bank won’t okay the deal.
- You eventually sell for less than market value.
Picture this scenario – After three months at your too-high price and no action, your real estate agent persuades you to lower the price. (This is the same agent who was so optimistic in the beginning!) By this time your house is no longer a fresh, new listing. Buyers who might have been interested three months ago at the current price have all found other properties. New buyers wonder what’s wrong with your house. Why has it been on the market for so long? What flaws did others see that made them pass up your offering? After three more months you lower your price again. Eventually a bargain hunter comes along and offers you bottom dollar. There are statistics to back up this phenomenon when you price yourself out of the market.
How To Price Correctly
It is absolutely imperative to find a real estate agent who will tell you the truth about the market value of your property rather than the high price you want to hear. In choosing the wrong agent you waste precious time, experience anger and frustration over the lack of activity, and eventually settle for less money on your sale.
Don’t cavalierly pick the agent who quotes you the highest sales price. Carefully assess the homes that are your competition.