Putting a decent price on your home can be trickier than one would expect and there is a science behind it.
The majority of homeowners price their homes based on their emotions and not cold hard data.
Smart sellers know that emotions can never capture the true value of a house and they lean towards numbers in order to get an accurate price for their home.
However difficult it might be, here are 4 things that savvy home sellers do when pricing their homes for sale:
No.1 – They avoid overpricing
There’s no escaping this one: it remains a classic; year after year, decade after decade!
Many homeowners think that it is okay for them to overprice their home in the beginning to ‘give it some room for negotiations’.
Who knows? They might just get the price that they are asking?!
Even though you can lower the price at a later stage, this is still something that is risky and you will sacrifice a lot in the process.
It leads to the most obvious pitfall that you definitely want to avoid when selling your home: a home that is listed for months without any offers. This can definitely set you back and keep you from moving into your new dream home.
If you have already purchased that new home then you should prepare yourself for paying off two mortgages at the same time.
A lot of time and money is wasted if the pricing of the house is not right. What’s even worse is that when you do start lowering the price of the house, buyers might think that there is something wrong with it.
Today’s home buyers are smart and educated, and it won’t be long before you’ve lost the attention of these interested home buyers by overpricing your home.
No.2 – They adjust the price where needed
Once you have put your home on the market, you will accumulate another set of data that will serve as the ultimate test: how buyers react.
A very simple way to tell if your price is too high is if you have no or little buyer showings. Lots of showings and no offer on the other hand, means you have market well but it is still overpriced.
It will highly likely all boil down to location and neighborhood. A similar house might have sold faster in a different area.
Adjust your house according to data and you will have a quick & happy sale.
No.3 – They don’t expect Rand-for-Rand returns
There are two common traps homeowners easily stumble into:
(1) confusing actual value with sentimental value
(2) assuming that renovations should result in a Rand-for-Rand increase in the selling price. For example, it might seem obvious for many homeowners to think that their house is worth so much more after putting in new flooring, but they tend to underestimate the value that the renovation leaves on the house.
You should also consider the neighborhood of your house: very little buyers will buy a beautiful house in a bad area.
Overall, this is not to say that renovations are a waste of time. When you decide to renovate, stick to the standard that is upheld in the neighborhood to increase the value of your home.
No.4 – They use comparable sales
The best pricing strategy is to work with a real estate agent who knows about comparable sales in the area. During this process, they will not only look at your house, but they also compare it to homes in the area which have similar features.
Once they have assembled a list of the houses and the recent prices that were paid for those units, they can come up with a market-related price for your home.
After crunching the numbers, the price might be lower than you expected, but listing realistically and not idealistically is the best way to get your home sold in no time.