"Pricing Your Home To Sell Well"

How many times have you read that pricing your home incorrectly is the #1 For Sale By Owner mistake?  Well, it’s true, and if you make that mistake, it is money out of your pocket for no good reason. 

If you price your home incorrectly, one of two things will happen.  It either won’t sell, because you’ve overpriced it, or it will sell too cheaply, because you underpriced it, and you won’t make all the money out of the sale that you could.

FSBO sellers generally underprice their homes because they want or need to sell fast and think this is the way to do it. 

While the need to sell quickly is certainly a legitimate issue, the only real way to using low pricing to make a difference is to vastly underprice it, which may even drive people away because they wonder what’s wrong with the property. 

Not only that, but as a financial decision, taking a drastic hit on your profits is not in your long-term best interests, whatever your short-term needs may be. 

Why should you do this when it can be avoided?  No matter how desperate you are, you can sell your home at a decent price.

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Overpricing your home is an even more common problem.  

• It can be caused by greed…people getting so excited about the thousands in commissions they’ll save by going ‘for sale by owner’ that they want even more. 

• It can be caused by misunderstanding the selling process…”we’ll overprice it by 10% because buyers will expect to negotiate”, not stopping to think that just because someone makes a lowball offer doesn’t mean you have to accept it…or that a negotiated offer won’t be one that you are quite pleased with because you priced correctly in the first place. 

• It can be caused by sellers not being aware that potential buyers have a treasure trove of resources at their fingertips and are fully aware of how much homes like yours are being sold for…you aren’t going to fool them into overpaying for your home.

• It can be caused by simply forgetting that your home is worth only what someone will pay for it…not what you think it’s worth. 

Regardless, pricing your home too high will keep it from selling.  Plus you’ll pay more in mortgage payments, taxes, and insurance while you’re waiting, and still have to lower the price to the appropriate market value, or break down and hire a realtor to sell it for you and pay the commission you were trying to avoid in the first place. 

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No matter what your situation or why you are selling your home, there is no reason why you can’t price your home to sell well…and it’s easy to do.

While you've undoubtably read about CMAs and doing the legwork yourself, the best and easiest way to determine the appropriate selling price of your home is to spend a few hundred dollars and hire a professional real estate appraiser.   After all, that’s what the bank or mortgage company will require for determining the value of your home.