FSBO Help Part 7:
"Drop the Price Before You Pay the Price"
I know, I know. The house behind you isn't as nice as yours so you should price yours higher. Or, you spent $30,000 remodeling last year so you should be able to add that amount to the asking price. Or, the house down the street is the same as yours so you should be able to ask the same amount that they got last year. Well maybe you should be able to do all these things, but the fact is that in this market you can't.
"But, the house behind mine isn't as nice..."
Don't decide on a price based on the "niceness" of your home compared to others for sale in your neighborhood. If you neighbor is asking $500,000, and your home has better upgrades, your first impulse might be to price yours at $525,000. Remeber, just because your neighbor is asking $525,000 doesn't mean his is going to get $525,000. Wouldn't it be smarter to price yours at $499,000? A buyer will look at both homes, see that yours is better, and also see that your asking price is slightly less than the other home. This makes the buyer's decision a no-brainer.
"But, I spent a lot of money on remodeling..."
Maybe you put in a pool, or maybe you remodeled the kitchen. These are things that should add value to your home, right? Well, yes and no. In a market saturated with homes for sale buyers have what seems like an unlimited amount of choices for homes in their price range. Let's say there are several homes in your neighborhood priced at $500,000. You have a similar home, but yours has a remodeled kitchen that the others don't, so you price yours at $530,000. Now, after looking at all the homes it's possible that a buyer will think that your gorgeous kitchen is worth paying an extra $30,000 for. However, it is also very likely that they would rather buy one of the other homes priced at $500,000, and then spend $20,000 out of pocket on their own remodeling job. They've just saved themselved $10,00 AND given themselves the luxury of picking out their own favorite colors, styles of appliances, etc. Once again, it might be worthwhile to price your home the same or less than the other homes in the neighborhood. When the buyer tours all of the homes for sale, yours will stand out as the best value for the money!
"But, my neighbor got a lot more money for the same house last year..."
Unfortunately, anyone who watches the news or reads the newspaper knows that the houseing bubble has long since burst, and prices have been declining ever since. No matter how unfair it seems, prices this year are down quite a bit from years past. Get a competitive market analysis and price your home accordingly. On the upside, if you price right and sell now, you will likely sell at a higher price than if you wait 6 months.
Drop the price before you pay the price!
Remember, your job when deciding on a price for your home isn't necessarily to come up with a fair price compared to other homes for sale in the area. Instead, your job is to come up with a price that makes your home the best value compared to other homes for sale. If you keep your asking price higher than the others because your home is "nicer than theirs", you are forcing each and every buyer to justify your price. Dropping your asking price and making your home the best value around virtually guarantees that you will get an offer before your competition does. And remember, the sooner you get offers, the sooner you sell your home!
(This is the seventh post in our 7 part series "FSBO Help".... Add us to your "favorites" and stay tuned for more!)
FSBO Help Part 1: "Thinking INSIDE the Box: Packing to Stay Ahead of the Pack"
FSBO Help Part 2: "Why Staging is Taking Center Stage"
FSBO Help Part 3: "Top 10 Ways to Sell Your Home Faster Than the Neighbors (tips 1-5)"
FSBO Help Part 4: "Top 10 Ways to Sell Your Home Faster Than the Neighbors (tips 6-10)"
FSBO Help Part 5: "5 Reasons Buyers Hate Your House"
FSBO Help Part 6: "Why the Guy Next Door Has No Idea What He's Talking About"
Meghan Mullee
Jupiter, FL Real Estate
Copyright © 2008 Meghan Mullee
The Take 5 Team
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