One of my favorite investment houses that I have ever purchased was a studio shack with a flat roof. Even though the home wasn’t conventionally pretty I purchased it because the price matched my perceived value of the home as a buyer. This ugly house has been a part of my rentals for over 15 years and has never been vacant for a full week. If a home is priced correctly it will sell, the ugly house I bought is a perfect example.
- Getting What Your Home is Worth: When you list your home correctly many buyers see this as a deal or as fair. They are more willing to offer the full price or even slightly over full price in order to insure that they will be the buyers. In addition, when a home is priced well it can many times have multiple-buyers allowing the seller to choose what terms and which buyer they would like to work with.
- Creating competition and urgency. A well-priced home new on the market creates competition and urgency. Just last week there was a home on the market that appeared to be 15,000 underpriced my buyer offered 15,000 over list and wasn’t even close to getting it because there were 10 buyers bidding.
- Over-priced means helping your competition. As summer approaches the inventory levels will start to increase. Other homes similar to your in your neighborhood may go up for sale the same time that you decide to. By overpricing your home, you are making the other homes in your neighborhood look like a good buy. These buyers will be more likely to view and purchase the correctly priced home than your over-priced home in the same area.
- Over-priced homes mean low ball offers. Many times buyers that do view a listing that is over-priced are much more likely to make a low ball offer. Over-priced homes can have offers 20k below asking price or lower. Their hope is that since the home has been on the market for a while, with few showings the seller will be desperate to sell at any costs, even if that means a huge cut.
- Over-priced homes don’t get showed. There are many reasons why over-priced homes sit on the market forever. Many times they are out of the buyers’ price range or other agents know it is above market value and choose not to show the home. Overall homes that are not priced well can sit on the market for months, which isn’t good for the seller in the long run.
It is so important to use a broker who can provide you with a Comparative Market Analysis that outlines how much similar properties in your area are worth. If you are thinking of selling your home, feel free to contact me and I will provide you with a free Comparative Market Analysis.