Sellers Beware....Pitfalls of Over Pricing Your Home

By
Real Estate Agent with Sun Lakes Realty DRE #01492138

Sellers Beware....Pitfalls of Over Pricing Your Home

It's hard for homeowners to be realistic when they are emotional about the home they have lived in and raised their family in. But this is exactly what sellers need to do so that they can make rational decisions about a list price that will actually result in a sale.

Your decision should be based on homes that have sold in your area that could be considered somewhat comparable to your home; Realtors and Appraisers called them ‘comps’. Stop in at a few open houses in your neighborhood and see how they compare with yours.

Try to put yourself in the buyers' shoes. This is easier for sellers who are also buying in this market. They know what it's like to want to make sure they're getting a good deal. Your house needs to be listed at a price that is enticing to buyers because it represents a good value. In most areas, buyers are buying in a market knowing that prices might drop again until the market fully recovers.

Sellers Beware....Pitfalls of Over Pricing Your Home It's hard to resist the temptation of trying for a higher price than the comparable sales indicate. However, you won't be happy if your home is on the market for months with no activity, and each time you drop the price it feels like too little too late. You can end up selling for less later if home prices in your area are still declining. By overpricing your home, you can end up netting less if the home stays on the market a long time.

You refinanced your property in the past year so you were given a great price by the appraiser but beware! Refinance appraisals are notoriously inaccurate in terms of market value; usually too high. An appraiser is attempting to gauge what price a buyer would pay but has no contract to compare. A high refinance appraisal can leave the seller with a false expectation.

Listing your home based on what you want or need to net from the sale won't motivate buyers to pay more. Buyers pay market value. They're won't overpay in today's market.

Find out what buyers are looking for in your area and see how your home matches up to their expectations. Generally, today's buyers are looking for a home that is well-located, in good condition and is priced right for the market.

If your home needs a lot of work compared with the competition, you'll either need to have work done before selling, or discount your price accordingly.

Location…Location...Location is so important so make sure your home is in the same area or that will probably reflect the price difference and the appraiser will know this when he comes to appraise your home.

In Summary: For best results, be realistic about the current market value of your home and what preparation it needs in order to sell successfully in today's market. Trust your Realtor as she/he has run the comps and will show you what has sold and what is currently on the market and realistically what you will net.

 

Be wary of real estate agents who tell you that your home will sell for a higher-than-supportable price just to get the listing. Then they work on you over time until you reduce the price to market value. Agents refer to this as buying a listing. Respect and trust the Realtor who gives you the facts and is confident they can sell your home for that price.

If you price your home too high, you are just wasting your time. Price it fairly and start packing.

Kristin Hamilton  DRE #014092138 Keller Williams Realty -I sell real estate in Riverside and San Bernardino Counties commonly called the Inland Empire. I am a trained and experienced Short Sale agent. If you are looking for a professional and experienced agent, I am just a click away. Google me at Kristin Hamilton-Real Estate Agent. Homeowners and Buyers both will find my services top notch and successful. Call me to sell your home; both traditional and short sales.

Sellers Beware....Pitfalls of Over Pricing Your Home California is a dream come true state no matter what your needs or wants are. We have year round warm weather, beautiful beaches, rustic mountains and desert communities. If you are looking for a home in southern California, please contact me. I am a local California Realtor, live in the Inland Empire community and aware of the local market. I am here to help you find a home or to sell the home you currently own. California has great opportunities to view Nature and Bird Watching. Whatever your needs are, you will find it here in California! From the Inland Empire you are 45 minutes to the beaches, mountains or desert. Housing is affordable in the Inland Empire area!

Subscribe to my blog; “Kristin’s Inland Empire Blog- www.kristinhamiltonblog.com.

If you want to sell your home, call Kristin @909-557-6966 or email me at kristinhamilton@kw.com

 

Google me at Kristin Hamilton, Keller Williams Realty, Redlands, CA. ©

 

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Rainer
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Julissa Jumper
Select Properties of Fayetteville, LLC - Fayetteville, NC
Fayetteville, NC Real Estate

Kristin: Great post! I can't think of any better advice to give a home seller. Thanks!

Apr 02, 2013 09:36 PM #1
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Kristin Hamilton CA Realtor
Sun Lakes Realty - Banning, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Julissa,

It is a  hard subject but sellers want a big price for their current home and then want to buy and get the lowest price possible so they have mixed feelings and it is hard to deal with emotion.

Recently a seller chose to sell his home himself on a street in my city and sold it way before market price just because he didn't want to pay commissions but he would have netted more even with commissions and wouldn't have hurt the comps in the neighborhood like he did. He sold the house about 55K lower than he should have but nothing you can do if the seller refuses to listen to reason.

Apr 03, 2013 12:45 AM #2
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Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Kristin - pricing, condition and location. It's that simple and yet so many sellers insist that their home has some sort of magical quality. I back up my list price suggestion with hard data and explain how/why I came up with that price. If they won't listen to reason, I excuse myself from the deal. It will just create hard feellings - I refuse to have listing sit on the market without any offers or showings. What good does it do?

Apr 03, 2013 03:37 AM #3
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Kristin Hamilton CA Realtor
Sun Lakes Realty - Banning, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Debb,

You are so right but sellers do not always see their home in the correct light and neither do appraisers. I had a home for sale and I had worked really hard on comps and found identical homes and this particular home (same track) was perfect and had a totally remodeled kitchen, wood floors throughout and was just turnkey. We got 3 full price offers and negotiated one within a few days. Only 8 days on the market and then the appraisal came in. Gave the home top grades and did not call out any repairs but about a block away from this home the neighborhood started going downhill with older home and apartments and mentioned that it was closer to this area than the other comps. The other homes were just a half a block to a block away but he gave it a $5,000 reduction in price so we had to reduce the price and close.

Apr 03, 2013 04:55 AM #4
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Karen Kruschka
RE/MAX Executives - Woodbridge, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Kristin  You really covered the subject of pricing for sale as a professional who knows her craft

Apr 03, 2013 08:33 AM #5
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Kristin Hamilton CA Realtor
Sun Lakes Realty - Banning, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Karen,

I tried to cover it all as if someone was asking me questions. I have had this happen several times and I got the listing as I was the honest one and didn't try to pump up the price and explained about the pitfalls of overpricing and losing money.

Apr 03, 2013 02:10 PM #6
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Dan Tabit
Keller Williams Bellevue - Sammamish, WA

Kristen, Over pricing is a huge mistake.  If a seller wants top dollar, the realistic or even lower range pricing, if handled well can net the seller more in the end.  Great post!

Apr 03, 2013 04:45 PM #7
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Kristin Hamilton CA Realtor
Sun Lakes Realty - Banning, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Dan,

Yes, You are so right as a good Realtor can negotiate a great deal for their seller. But if the house is overpriced to start with, those offers will not be coming in as buyers are prettys up on comps in an area.

Apr 04, 2013 01:26 AM #8
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