Home Pricing 101
You don’t need to be a rocket scientist to know when the price for a home just isn’t right. Ask anyone who has ever priced a home too high. . Eventually one has to accept the market reality and chop the price.
Home pricing is more of a science than an art, but many homeowners price with their hearts instead of realistic data. Running the numbers is always the better route to an accurate home price.
However, mere data won’t give you the full picture That’s why it is best to get your price from a real estate professional you trust
So let’s look at what happens when you overprice your home
Sometimes homeowners think it’s okay to overprice at first, because — who knows? — maybe you’ll just get what you’re asking for. Although you can certainly lower this inflated price later, you’ll lose a lot in the process. The most obvious loss: A house that remains on the market for months can prevent you from moving into your dream home.
But it gets worse. You will have lost that just listed excitement which happens for new entries into the marketplace
And wore again. Lowering the price causes potential buyers to wonder just what is wrong with your home.
Buyers today are savvy and educated. They know what your home is worth and they will not pay more for it
So why would anyone intentionally overprice their home? It isn’t that they want to, it is just that they make common erroneous assumptions.
The first is confusing actual value with sentimental value, assuming their home is worth more because they lived in it and loved the time they spent there and put in all those special touches they loved.
And that leads us to the second common misconception: Assuming renovations result in a dollar-for-dollar increase in the selling price— or perhaps even more.
First of all, that is never the case, even in the best of situations But in a worst-case scenario where the homeowner upgrades too much for the neighborhood there is a disconnect for a buyer. The additional upgrades should add to the price but buyers who can afford that price want a neighborhood where all the homes are equally nice
“Don’t buy the nicest home on the block” is common and sage real estate advice for a good reason.
That’s not to say that renovations aren’t worth it. You certainly want to enjoy your home while you’re in it, right? Judicial renovations make your home more comfortable and functional but should typically reflect the neighborhood. Your REALTOR® can help you understand what which upgrades maximize value when you sell and which appeal most to buyers.
Many a overpriced home comes from online tools, like Zillow’s “Zestimate,” giving an estimated market value based on local data. The estimates are wildly inaccurate. A Virginia-area real estate company, McEnearney & Associates, has compared actual sold prices with predicted online estimates for several hundred homes in the area for the past few years and concluded the prices were wrong more than half the time.
The best pricing strategy will come from a real estate agent, who will use comps (short for “comparable sales”) to determine an appropriate listing price. They’re not just looking at your neighbors; they’re seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.
Once they’ve assembled a list of similar homes (and the real prices buyers paid), they can make an accurate estimate of what you can expect to receive for your home. If a three-bedroom home with granite countertops and new wood floors down the block sold for $500,,000, expecting more from your own three-bedroom home with granite countertops and new wood floors is nonsensical. Even if you found a buyer willing to pay more, the mortgage appraisal would kill the deal.
Make it easy on yourself. Ask a real estate professional. They’ll work with you to determine a fair price that’ll entice buyers. The number might be less than you hope and expect, but listing your home correctly will save you a lot of time and money
Once your home is on the market, you accumulate the Ultimate data: how buyers react.
There’s an easy way to tell if you’ve priced your home too high: If there are no showings, it’s way too high. Showings but no offers mean it is marketed well — but it’s overpriced once people get inside.
When it comes to finding a buyer, pricing your home according to data — and the right data, at that — is crucial.
If you would like an evaluation of your home’s value at this time call me at 831.801.5110 There is no charge for this service