Lets face it, pricing your property is anything but easy, what with all the history and hopes this magic number entails. Of course, everyone wants to make a profit. You’re property is in better shape than when you bought it, right? Right?
Well, not necessarily. Too many sellers fall prey to myths about land/home pricing that seem to make sense at first, but don’t swept in with the reality of real estate markets today. To make sure you haven’t bought into any of this malarkey—since the buyers you’re trying to attract sure haven’t—here are some common pricing myths you’ll want to remove from your thoughts so you kick off your property-selling venture with realistic expectations. Now is the time to get real, folks!
Everyone always make money when you sell their property.
Sure, real estate tends to appreciate over time, however selling your property for more than you paid is by no means a given, and your return on investment can vary greatly based on where the property is.
1) If your property is overpriced, it’s no big deal to lower it later
Sorry, but overpricing your property isn’t easily fixed just by lowering it later on. The reason: properties 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. As such, they might still steer clear, or offer even less than the price you’re now asking.
Bottom line: “Price your real estate appropriately from the beginning for your best shot at having a quick and easy sale.
2) Price your property high to make big bucks
We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that your overpriced property just doesn't sell.
“While the payday might sound appealing, you’re actually sacrificing the best marketing time in exchange for the remote possibility that someone is going to overpay for your property.
While certain buyers might fall for this, however this becomes far less likely if they’re working with a buyer’s agent who will know all too well when a property is overpriced, and advise their client to steer clear. And this can lead to problems down the road.
3) Pricing your property low means you won’t make as much money
Sellers are often leery of pricing their property on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your properties price past your wildest dreams.
4) A past appraisal will help you pinpoint the right price
If you have an appraisal in hand, from when you bought or refinanced your property, you might think that’s a logical place to start to price your property. It’s not!
An appraisal assigns your property 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.
“Since lenders know markets can change in six months’ time, it’s important for sellers to understand that a previous appraisal is never a reliable source for the current value of a property.
Hopefully you find the information useful.
I wish you well and invite you to contact me if you have questions.
Please stay healthy and we hope to hear from you soon to discuss your property search and status.
Until Next Time!