Home pricing is the single most important thing that you will do when listing a home for sale. Although ensuring the home is clean, de-cluttered, & presentable is extremely important, even the most presentable home will not garner any buyer interest if it is overpriced. Unfortunately, the current seller’s market has created a pricing trap for many sellers that have unrealistic expectations. We discuss a few common mistakes that we see with home pricing below.
Avoid these things…
- Setting an unrealistically high price from the start: Oftentimes, sellers prefer to ask an unrealistically high price when first listing a home for sale because “we can always reduce the price later”. While it is true that price reductions may take place in the future, you run a tremendous risk that the listing may become stale. In a hot seller’s market such as the one that we are currently in, listings may become stale in as little as a few weeks. In addition to setting a realistic listing price, a good strategy is to formulate a scheduled price reduction plan with your real estate agent up front, in the event that no offers are received by certain dates.
- Focusing too much on a recent sale down the street: Although recent closed sales are critical in determining a list price for your home, it is important that you do not become too hyper-focused on one particular closed sale. Oftentimes, sellers will feel that their home is better than the highest sold property in the neighborhood, but conveniently dismiss lower-priced home sales in the area. A comprehensive comparative market analysis provided by your real estate agent will be the most thorough and objective way to determine a listing price.
- You typically do not recoup all home improvement costs: It is important that sellers realize that all money spent on home improvements is not recouped upon selling a home. For example, although high-impact windows are an important & highly desired feature for South Florida homes, many buyers expect this feature in this market. The best approach for accounting for these upgrades is to analyze the comparative market analysis prepared by your real estate agent and adjusting valuations for various home improvements.
- Ending the list price in “9”: For years, many have believed in pricing properties with a number ending in “9”. For example, you may see many homes listed at $499,999. The thinking behind this pricing strategy is that you will capture all searches for homes priced below $500,000. However, many sellers don’t realize that they may also miss many searches for homes priced $500,000 and above. For example, some buyers may search for homes priced between $500,000 and $700,000. It is recommended to simply stick to even numbers when pricing your home.
Summary
Unrealistic home pricing expectations from sellers is likely one of the biggest challenges faced by real estate agents. Inevitably, home sellers oftentimes have emotion and pride tied into their valuations. On the flip side, buyers are quick to critique any home in order to justify a lower sales price. In other words, to the seller their home is the Taj Mahal. To the buyer, it is simply a shack. It is for these reasons that it is critical to have a local and knowledgeable real estate agent representing each side of the transaction. Are you looking to buy or sell a property in South Florida? Live South Florida Realty, Inc. has been a top producing real estate brokerage throughout South Florida & we can assist you as well.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!
