When homeowners are preparing to put their property on the market, one aspect is usually foremost in their minds: How much money can I get? Setting an accurate asking price can mean the difference between a timely offer and having a house languish for months, drawing little interest from buyers. With that in mind, potential sellers should make every effort to block out the noise that often surrounds the intricate art and science of pricing. There are plenty of myths that may cause sellers to lose sleep at night as they attempt to separate fact from fiction. The following are statements that can stand in the way of a successful sale.
1. 'If we keep waiting, a better offer will come along!'
When sellers receive an offer after the first showing, they may be skeptical or hesitant to accept it, wondering if other prospective buyers would be inclined to pay more. Thoughts of potential bidding wars could cause sellers to want to wait and see who else falls in love with their home. But, consider the old adage, "A bird in the hand is worth two in the bush." There's no guarantee other would-be buyers are waiting around the corner, and oftentimes your first offer is your best offer. If the offer is a fair one, entertain it and work with that buyer to get your home SOLD!
2. 'Getting an offer right away, means the agent priced it too low!'
When sellers receive an offer early in the process, as excited as they might be, some may still find themselves wondering, "Should we have asked for more money? Did our agent price it too low?" While it's natural to be skeptical, receiving an offer on the early end of the spectrum most likely means your home was priced accurately and attractively. If you trust your agent, you know he or she didn't pick a number out of the sky, but rather based it on extensive market research. So, be glad your sale is quickly moving in the right direction.
3. 'We should price it so there's room to negotiate!'
Let's be honest: All sellers want to get Top Dollar for their homes. But overpricing it with the intention of being willing to accept a lower offer may just leave you empty handed in the long run. Plus, if you have to drop your asking price multiple times, buyers may begin to wonder what's wrong with the place — other than the price, that is. Days on the market begins to work against you as well.
4. 'That's not what my Zestimate says it's worth!'
Oftentimes, homeowners are eager to believe Zestimates or other automated valuation models when that price exceeds their expectations. Yet, when the opposite happens, they disregard it as outdated or erroneous information. The point is, these automated valuations are often inaccurate, and sometimes as much as $50,000. Trust your real estate professional who knows how to do the necessary research to guide you in pricing your home correctly. Enough said.
5. 'We can add all renovation costs to the asking price!'
Sellers may adore the improvements and renovations they've made and think they can automatically add those costs to the asking price. But remember, not every change is going to land a huge return on investment. If you're curious about what you can expect on those fixes, check out Remodeling Magazine to get an idea of which upgrades yield the biggest bang for your buck. Also, as you're making changes, bear in mind that the infinity pool you may view as an asset could just seem like a huge liability to a buyer.
6. 'My Realtor® overpriced my house to make a larger commission.'
Agents are paid a percentage of the sale price of the home. However, even if they were to raise the ask by $25,000, in most cases that would yield an additional $1,500 in commission. Since that percentage is split four ways between the agent, the agent's brokerage, the buyer's agent and the buyer's agent's brokerage, that would only leave your agent with less than $500 more in his or her pocket. It's not likely an agent would blow a potential quick sale — and take on weeks or months of additional showings and marketing expenses — for a few hundred dollars.
7. 'Reducing the price is a sign of weakness!'
While no homeowner is eager to drop the listing price, if time is passing and there's been little to no interest, it could be time to consider lowering the ask. Remember, time is money. While you're waiting for someone to meet your price, you're still paying the mortgage, taxes, utilities, and insurance, not to mention the inconvenience of not meeting your moving goals. Plus, sometimes, lowering the price can put your home in front of a group of new buyers, which could generate a lot more interest and, ultimately, get the price back up closer to where you want it.