Tips to Pricing Your Home in a Down Market
The kiss of death in this market is over-pricing your home.
Many hard-working, conscientious home owners who have lovingly maintained their homes have to price it below what they ever imagined just to sell it in today’s market.
Here are a few tips to pricing your home right the first time (instead of 6 months later when it hasn’t sold yet!):
Price your home where other similar homes are actually SELLING, not where others are currently LISTED.
This tip attempts to poke a hole in one of the most common pricing mistakes, namely, adding in some “negotiating room” in the price. Your home will sell just fine, but only when it is at the right price range where others are currently selling.
And I have a simple definition for homes that are listed but not sold yet. They are the homes that are STILL over-priced.
Price your home based on an honest assessment of condition.
This is a tough one. You love your home, but does it need a few repairs or updates to make it really sparkle when the buyers show up?
The current market is brutal on homes that need updates or TLC. My rule of thumb is to take the actual cost of repairs and multiply by three. That is the actual market penalty for repairs needed. That’s one reason that bank-owned homes seller for such a steep discount.
But remember that clean and move-in ready sells. Don’t think you have to replace your white kitchen appliances with stainless steel ones. You don’t.
The bottom line is to take into account any work that is needed and compare your home to others that have sold in similar condition.
Price your home where the market price will be in 30 – 60 days, not where it was last month.
The worst case scenario is to slightly over-price your home then make small corrections every 30 days – all while the market continues to slide down too. This is called “chasing the market”. It is also called the death spiral.
One of my past listing clients listened to her out-of-town relatives instead of her in-town real estate professional. She over-priced her home by $10,000 out of the gate. Every 30-60 days, we had a fight about dropping it another $5,000. During this time, the market was dropping too! What started out as an over-priced $160,000 home is now priced (a year later) at $140,000 and not moving. The market fell out from under her. Her home may have sold in the first 60-90 days if it had been priced $10,000 below her initial price, and she could have moved on with her life. Now she owns two homes and the old one is just sitting…
My take home: Bite the bullet and price it right the first time to get the highest return and the quickest sale.
Do you have additional questions about pricing your home to sell?
If you would like to sell your property for the best price in today’s real estate market, use our contact form or call David Baker today for a free, no-obligation property valuation of your home.
David Baker, MBA
Broker/Owner
Baker Realty Group
(614)989-5662