How to Avoid Home Price Self-Delusion

Real Estate Broker/Owner with Everest Peak, Inc.

If your home isn't selling, there could of course be a wide range of reasons for this. But in such a buoyant market as the one we're currently enjoying, it's a good bet that your lack of success could well be because your asking price is too high.

One of the key skills of a top performing real estate agent is the knowledge and experience to be able to suggest an asking price that will simultaneously appeal to buyers and also maximize the return for the seller.

Needless to say, this is a delicate balancing act.

Unfortunately, some sellers will be disappointed/annoyed to discover that their home isn't being priced by the agent at what the generic pricing websites say it is worth.

Perhaps even more unfortunately, there are agents out there who will perpetuate the delusion and simply list the home at a price that appeases the owner, but will do absolutely nothing to attract viewings. This type of agent presumably works on the basis of get the listing, then gradually introduce reality by suggesting price drops the longer the home doesn't sell.

We've covered generic home pricing websites on this blog in the past, but it is well worth returning to the subject in the context of the current market and this blog topic.

In this age of virtually universal internet access, in one form or another, the overwhelming likelihood is that anyone thinking of selling their home will go to at least one of the well-known generic sites to get an idea of their home's value.

Sadly, the truth is that, all too often, the price that's generated will have little relationship to the actual value of your home.

These websites do not use the same automation methods to arrive at the prices they generate. They are also always calculating values based on a range of historic information, including county assessor's office records, which are never current and can very easily not contain every important detail about your home, including its current condition and if you've added to the property.

And because these sites have to rely on outdated information, usually at least three months old, they are not sensitive to current market conditions and whether or not it is a buyer's or seller's market in your locale and at your broad price point.

Essentially, the price you receive is arrived at by a set of pre-determined computer calculations and inputs, hence the human experience factor and actual knowledge of up to the minute pricing is completely absent.

And by the same token, of course, it's quite possible for generic sites to undervalue your property as well...

All this having been said, there is, of course, no harm in getting a generic site price as a very general indication of your home's value. However, it's equally important that you seek the professional advice of a first-class agent to get a far more accurate appraisal of worth, taking into account all relevant factors.

Homes need to be priced "in the market". This means that, to attract the greatest number of potential buyers for a full optimized return, it is essential to price at the correct market value. Sell it too high and you'll not be getting many viewings and struggle to get an offer at all. Sell it too low and you'll get lots of viewings but potentially achieve a poor return.

Your agent is absolutely best placed to guide you in this process. 

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