Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data.
Smart sellers know that crunching the numbers is always the better route to an accurate home price. Here’s how they do it.
#1 They Avoid Overpricing
Homeowners often think that it’s OK to overprice at first, because — who knows? — maybe you’ll just get what you’re asking for. Although you can certainly lower an inflated price later, you’ll sacrifice a lot in the process.
Just ask Candace Talmadge. She originally listed her Lancaster, Texas, home for $129,000, but “eventually had to accept the market reality” and chop $4,000 off the price.
The home’s location proved challenging: Buyers were either turned off by the area — a lower-income neighborhood south of Dallas — or unable to afford the home.
“Sellers have to keep in mind the location,” says Talmadge. “Who are going to be the likely buyers?”
The most obvious pitfall: A house that remains on the market for months can prevent you from moving into your dream home. Already purchased that next home? You might saddle yourself with two mortgages.
“You lose a lot of time and money if you don’t price it right,” says Norma Newgent, an agent with Area Pro Realty in Tampa, Fla.
And worse: Continually lowering the price could turn off potential buyers who might start wondering just what is wrong with your home.
“Buyers are smart and educated,” says Lisa Hjorten of Marketplace Sotheby’s International Realty in Redmond, Wash. “You’re probably going to lose them.”