Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months—or that have undergone one or more price reductions—make buyers presume that something must be wrong with it and they may begin to think the seller is getting desperate and wants to be rid of it. As such, they might still steer clear, or offer even less than the price you’re now asking. Bottom line: Price your home appropriately from the beginning for your best shot at having a quick and easy sale.
This strategy may backfire on you. Yes, it could draw more people through the door and it may cause a bidding war however, discerning purchasers will be suspicious and see through this tactic. Consumer Affairs also has hefty fines for underquoting. If you price your home according to the market, people will see value in it and will be willing to offer a competitive price for the home.
Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home’s new owners are inheriting all your hard work. The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. Also any profit can vary greatly based on which renovation you do.
If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It’s not! An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old. It’s important for sellers to understand that a previous appraisal is never a reliable source for the current value of a home.
While some ‘dodgy’ agents can resort to this, most agents are honest and trustworthy. Knowledgeable local agents will know what prices homes are selling for in your area and know which part of the cycle the property market is in. Ask the agent to ‘justify’ the price they wish to advertise your home for against the comparable sales prices in the area. If an agent quotes a price that seems too good to be true, it often is! Get a second and even third opinion to avoid your home stagnating on the market and you having to reduce the price any way.
Our Sales Consultants will give you a competitive and honest market appraisal for your home. Contact us to arrange a confidential appointment.