When you put your home on the market, the one aspect that usually comes to mind is profit. Without a doubt, every seller’s main goal is to sell their home for the best possible price. However, in an effort to get the best deal possible, many sellers fall prey to myths about home pricing that don’t reflect the current real estate market.
6 Common Pricing Myths When Selling A Home
Setting an asking price for your home will never be a walk in the park. But coming up with an accurate number can give you the biggest advantage. It can mean the difference between quickly getting an offer and risking your home to sit on the market for months, losing the interest of many potential buyers.
So if you want to get the most out of your home sale, disregard these most common myths about pricing a home and start your journey with some realistic expectations!
“Getting an offer right away means my home was priced too low.”
Many sellers think that getting a quick offer is an indication that they priced their house too low. They are contemplating whether they should have asked for more money or felt that their Realtor® “gave their home away” because it was sold too quickly.
But here’s the reality: getting an offer (or offers!) in the first few days most likely means your home was priced accurately and competitively, which attracted multiple buyers. Your home has the right price on the right market that’s why you received multiple offers even in a short amount of time.
“Let’s wait longer for a better offer to come along.”
After receiving an offer from the first showing, sellers may be hesitant to accept it, wondering if other potential buyers would be keen to cough up more money for their beloved home. This is another common assumption among many sellers: if they’re willing to wait long enough, a better offer will come. The thoughts of potential bidding wars could prompt them to be in a “no rush mode” when it comes to selling their home.
However, that’s not how real estate works most of the time. The longer your home stays on the market, the worse the offers could get. Or maybe you’d get none at all. This is because homes sell for the most money when they are on the market for less than 30 days. According to the NAR 2018 Profile of Home Buyers and Sellers, recently sold homes were on the market for a median of three weeks. When a home has taken so long to sell, buyers will start to wonder what is wrong with it. They may assume that it was priced too high, or that there are issues with the property itself.
“That’s not what my home estimate says.”
Be wary of using any home value estimate tools you find online. The numbers they give can be inaccurate since they have not assessed your home physically, and haven’t taken into consideration any of its special features and the prices of the surrounding properties. Many home estimates go above or under the home’s real market value. Keep in mind to always trust your Realtor® over your home’s estimates.
“Overpricing our home will leave more room for negotiation.”
Every seller’s goal is to get top dollar for their home. However, overpricing your home thinking that you could accept a lower offer, later on, will never be a good strategy. The worst is it could just leave you empty-handed, especially when buyers start to wonder what’s wrong with your property. Trying to price it too high, thinking that it will create a lot of negotiating room will get you nowhere. Instead, buyers and their agents will steer clear of your property and will choose a listing that has a reasonable price.
Your Realtor® knows that negotiation is very important in real estate, so trust their experience in this matter. They will price your home appropriately from the beginning but will make sure there’s enough wiggle room so you can still get what you want out of the sale.
“Let's add the costs of all renovations to the asking price.”
You may have remodeled your kitchen, added a master bedroom, or replaced your garage door. But don’t think that the money you spent making these renovations will be recouped once you sell. Don’t set your expectations too high just because the potential new owners will be enjoying all the hard work you put into your property. Keep in mind that while some changes might see some return on investment, you won’t recoup the whole amount. Likewise, there are renovations that can give you profit, and there are those that can even hurt your home sale.
To get an idea of which upgrades yield the biggest return on investment, check out the 2018 ‘Cost Versus Value Report by Remodeling Magazine. For instance, you can expect to get back only 56% of the costs of an upscale bathroom remodel. Meanwhile, the projects with the biggest return include a garage door and entry door replacement.
“My Realtor® might overprice the home to get a larger commission.”
Real estate agents are being paid a percentage of the selling price of the home. However, this commission will still be divided up between his or her broker and the buyer’s agent, leaving the agent with less money in his or her pocket. Even with weeks or months of showings and marketing expenses, no agent would want to lose a potential sale just for the sake of a few hundred dollars. Trust your Realtor® because they’re the one who knows the market well, and the price given to your home was based on extensive market research.