You're all too familiar with it. When it comes to selling a house, your pricing approach can make or break your chances of a rapid sale. Pricing isn't always a simple, straightforward process that can waste time and money while also causing irritation for both you and the seller. Top real estate agents and brokers share the most common house price mistakes they notice and how to avoid them in this article:
Mistake #1: Ending A Price At 9 O'clock
"Previously, the pricing trend was to end everything in a nine, as they do in grocery and retail stores, but that doesn't work for online real estate searches," explains Deborah Bacarella of Elite Florida Real Estate. "I find that when a seller prices their home at $599,000, you lose all of the homebuyers who started their search at $600K."
The solution: Encourage your merchants to charge in even increments in order to attract more web searchers.
Mistake #2: Assessing Your Neighbors
"The most common pricing mistake I have seen in my 14 years in the real estate business is the seller comparing their house to the house that sold down the street or around the corner," Candy Miles-Crocker, an associate broker with Long and Foster Real Estate, Inc in Washington, DC, says. "Every seller believes their home is far superior to the home that sold down the street and, as a result, should be priced higher." When this occurs, sellers are rarely comparing apples to apples and fail to realize that the other house had features and facilities that their home lacked."
The solution: Make it clear to your clients that the comprehensive comparative market analysis you provide will provide them with a more accurate pricing plan than simply comparing themselves to their neighbors.
Mistake #3: Starting With Too High A Price
If a home is priced too high in the first few weeks, many purchasers will pass it over. Many of those original buyers may have already discovered something else or will demand a discount by the time you lower the price. "In our Minneapolis/St. Paul real estate market, we have a two-week window at the start of the listing period to get the best price." Consumers demand a discount after that," says Alyssa Granlund, a top-selling real estate salesperson at Edina Realty for the past 25 years.
"If you have a seller who is not willing to price where you believe the value is, discuss and agree that once you have had 10 showings without an offer, it is time for a price reduction down to your price recommendation," Granlund advises. Make this expectation clear to your seller at the time of the listing agreement. Price reductions should be agreed upon in the terms of your listing agreement and as part of your overall marketing strategy. This makes price reduction calls much easier to make and provides a standard for your seller to gauge against.
Mistake #4: One Dollar In Does Not Equal One Dollar Out
"Many sellers want to be compensated for the home improvements they made." While some enhancements bring value, they rarely contribute dollar for dollar," argues Miles-Crocker. "I once worked with a seller who had $2,000 custom windows." I reminded him that they were merely windows to a buyer, but he thought they increased the dollar-for-dollar value of the home. Needless to say, we couldn't agree on a price, so I didn't receive the listing, but the house never sold and he eventually rented it out."
The solution: Provide your clients with a thorough competitive analysis and modify accordingly for house renovations.