Five Pricing Myths to Avoid When Selling Your Home. Pricing your own home is hard, what with all the history and hopes this magic number entails. Too many home sellers fall prey to myths about home pricing that seem to make sense at first, but don’t jibe with the reality of real estate markets today.
Here are 5 common pricing myths you’ll want to rinse from your brain so you kick off your home-selling venture with realistic expectations. It’s time to get real, folks!
1. You always make money when you sell a home
Sure, real estate tends to appreciate over time. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live. So, don’t assume you’ll walk away with a profit until you’ve examined what’s up in your area first.
2. Price your house high to make big bucks
We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that an overpriced home just won’t sell.
While the payday might sound appealing, you are actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home.
3. If your home’s overpriced, it’s no big deal to lower it later
Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months—or that have undergone one or more price reductions—make buyers presume that something must be wrong with it.
As such, they might steer clear, or offer even less than the price you’re now asking. Bottom line is this: Price your home appropriately from the beginning for your best shot at having a quick and easy sale.
4. Pricing your home low means you won’t make as much money
Similarly, sellers are often leery of pricing their home on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your home’s price past your wildest dreams.
5. You can add the cost of any renovations you’ve made
Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell.
The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements.
BOTTOM LINE IS THIS:
Pricing a home for sale is as much art as science, but there are a few truisms that never change.
- Fair market value attracts buyers, overpricing never does.
- The first two weeks of marketing are crucial.
- The market never lies, but it can change its mind.
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