Pricing your home for sale can be challenging and many home sellers fall prey to myths about home pricing. Let’s take a look.
1. You always make money when you sell a home.
Appreciation is one reason you invest in real estate. However, the market value of your home depends on many factors, including condition, location, and competition. A competitive market analysis will help you determine market value and estimated net proceeds.
2. Price high to make big bucks.
An overpriced home is simply not likely to sell. As the northern Colorado market slows down, buyer competition has diminished in some price ranges. Additionally, a Buyer’s loan is contingent on an appraisal report using comparable sales that are unlikely to support a price higher than market value.
3. If your home’s overpriced, it’s no big deal to reduce it.
Homes that linger on the market for months can lead buyers to think that something may be wrong with the home. An acceptable offer is more likely to occur in the days immediately following the listing if the price reflects the market value.
4. Price too low and lose money.
Sellers are often leery of pricing their home on the low end. But low-priced homes can drum up tons of interest and a possible bidding war that could drive the final price above your expectations.
5. You can recover any renovation costs.
On average, you can expect to get back 64% of every dollar you spend on home improvements, and that profit can vary greatly based on which renovation you do.
6. A past appraisal is a good indicator of current value.
An appraisal assigns your home a value based on market conditions at a specific date, which becomes outdated very quickly. Lenders require an appraisal value based on current sales data.
7. The agent might overprice the house to make a bigger commission.
The agent does not want your home to linger on the market any more than you do! As the seller, you will set the listing price for the home, and negotiation with the buyers will determine the final sale price!
