How savvy MN sellers come up with the right price
Setting a high price and either hoping for a big payday or to negotiate down is faulty logic. While you can lower a price, you give up a lot in the process. The home may no longer be on the radar of the most likely buyers that would have looked at your home the first couple of weeks. Continuing to lower the price may make shoppers wonder what is wrong with the property.
Your home is likely to sit on the market far longer than average. If you have already purchased your next home, you could end up paying two mortgages.
Location is another consideration. A beautiful house might have sold for a high price, but a similar property may not sell for as much if it is considered too far out of town or has an undesirable feature like a long, unmaintained access road.
Don’t Expect 100% Return on Improvements
Homeowners can to stumble into two common traps: confusing actual value with sentimental value, and assuming to get 100% back on remodeling, new appliances and improvements. Sometimes remodeling can over-improve a property for the area making it harder to sell.
That’s not to say you shouldn’t improve your home and enjoy it while you are living there. A realtor can help you decide which renovations help resell, and which ones will offer less return. Our Homes and Lakeshore team also specializes in home staging. Sometimes making cosmetic improvements when you are getting ready to sell are the most valuable.
Home price perceptions are also skewed when owners look at sites like Zillow. Keep in mind this is artificial intelligence creating a value on market data without being familiar with the area or seeing your actual house. Their “Zestimate” is often wildly inaccurate.
You can use our automated tool to estimate your home’s worth, but for accurate pricing detail, give us a call. Both services are complementary!
Do Use Comparable Data
Reviewing what comparable homes sold for in your neighborhood, also known as comps or comparable sales, is the best pricing tool. However, each comp must be examined and adjusted to better match your property. Does a comp have four bedrooms and yours has three? What about the view? Consult a real estate agent, who will adjust these comparable sales to determine your appropriate listing price. Before we meet with clients, we research similar homes with closely matching floor plans, square footage, and amenities that sold in the last few months and show you how yours compares.
A word of caution when researching information on your own- comps are based on homes already sold, not homes for sale. The true value of a home is what someone is willing to pay for it, and you don’t want to inadvertently overprice your home based on the overpriced listing of a neighbor.
If you price your home realistically, based on accurate data, you’ll avoid a long, drawn out selling process.
Adjust the Price When Needed
The first two weeks of your home being in the market is critical. This initial period will provide invaluable feedback on how buyers react. If there are no showings, you have likely priced your home too high. If there are a good amount of showings but little interest, sometimes the property may not be meeting expectations once buyers get inside. Sometimes location can affect how a buyer reacts, such as if they feel the house is too close to a busy road.
An experienced agent can help you interpret these signals and make adjustments.
The best scenario is to price the home appropriately from the start and end up closing the deal in a reasonable amount of time at a price both the buyer and seller can live with.
When it comes to selling your home, amassing and interpreting data to set the right selling price out of the gate is crucial. Fortunately you have an expert to call upon to do all of the leg work- us!