Pricing a home properly is crucial. No matter how many things your home has going for it, the asking price can impact the sale.
When deciding an asking price, the tension often lies between what a person thinks their house is worth and what an agent assesses as the home’s market worth. Here are well-known myths about setting a selling price and why they’re not true.
The common wisdom is that it’s best to price a home on the higher end, allowing buyers to make their own offer and finding a compromise in the middle. However, a high asking price can immediately alienate buyers, and some may not even search outside of their price range, much less make an offer.
Many think that if you price a home as it’s actually worth, you’ll lose money. In fact, a reasonable asking price will generally lead to multiple offers, which lead to a bidding war, driving up the price. A sense of competition between buyers will help your wallet.
Re-listing raises the price
It’s tempting to think that if a home doesn’t sell, waiting a lot of time and re-listing it will allow the home to sell for more. But the longer a home is on the market, the more buyers can become suspicious of its worth. It also puts you, the seller, on edge and cynical that no offers you receive are sufficient.
Additionally, waiting a while to sell a home might increase your expenses, as you’ll have to make more repairs throughout the seasons. You might also have to do more to keep up with the competition.
“Bottom line” price
Some sellers have in mind a price that they will absolutely not go under, no matter what. But this mindset might keep you from accepting the best price you could see.
Close to asking
Many assume that all offers will be at least close to asking price. However, buyers don’t have the incentive to give up more money than they feel they have to. Offers could be lower than you expect on the first pass.
A lot of people think that a couple of outdated features won’t affect what someone is willing to pay. However, buyers are acutely assessing what kind of updates they will have to make once they move in. They will then subtract those costs from what they are willing to pay for the house.
Too far from asking
It’s easy to feel prideful when a price is way off from asking. As much as you can, try to keep a cool head. An offer is not an end-all-be-all but simply facilitates negotiations.