subject: How To Loose Equity When Selling Your Home In Any Market, Especially Today [print this page] There are many issues when selling a home but few are as important as pricing. Here, are 3 givens when selling a home.
1. Everyone wants to sell their home at the highest price possible and make as much money as possible.
2. Every buyer wants the best possible deal.
3. Every seller thinks his home is the best.
Unless your home is in the multimillion price tag range, or offers a very unusually design or location, chances are very high there are always buyers right now in the market place looking for a home like yours. From a seller perspective, pricing your home as high as possible and hoping someone will make an offer and negotiate a satisfactory offer is every seller's dream. Unfortunately, it is more a pipedream vs. a reality. Ask yourself this question, is it really the best way of selling a home? As a Realtor, for 23 years and having sold a thousand homes or more, unfortunately, being upfront with sellers in regards to pricing many times works against the agent, because the seller wants to hear what makes the seller feel good. Your home is worth this amount, and the higher the price the more valuable the agent is in the seller's mind. Overpricing a home, in the beginning of listing the home, in any market will assure you the loss of equity or profits when the home eventually will sell. This is a rule which holds true over and over again, if you want to have your home stay on the market for an extended period of time and at the end sell below market value, my recommendation is, overprice your home. In today's instant information environment, what is the worst thing which will happen when you for instance:
Under price your home.
1. Thousands of people, by the power of the internet, will almost instantly be informed of the great value your home might represent.
2. You will get tons of showings, buyers who will fall in love with your home.
3. You will get multiple offers, buyers will fight for your home, not because of price, but because they fell in love with it.
4. You will ask for the highest and best offer.
5. You will negotiate the price above asking price.
6. You will sell your home fast, and you are done with it.
7. This the law of scarcity, and how auctions work as well, people bid up the price.
What will happen when you overprice your home?
1. Thousands of people will instantly get your overpriced information, and turn away.
2. You will get few showings not many buyers will see it, and not many will fall in love with your home.
3. You will get no offers or low ball offers.
4. You will not get to a contract.
5. You will sit and wait.
6. You will reduce the price.
7. You will get mad at your agent.
8. You will eventually pull your home off the market.
9. You will find another agent and reduce the price.
10. You will reduce the price again.
11. You will eventually sell your home at a lower price.
If your home is so unusual and so great, plus in such good condition, overpricing will prevent buyers from seeing it and they will never be able to make an offer. Overpricing a home is the greatest mistake made by the seller and testing the market is a theory which does not work, because how can you test the market when nobody wants to see your home. In today's information age, everything is recorded at lightning speed on the internet and everybody has the information at their fingertips or IPhone. My best advice to any seller is to price the home slightly below market, and buyers will flock to your home, and you will achieve the highest possible price and many times above asking price.
