Sellers: How to set the right price

While it can backfire, I have learned that, in many cases, it’s educational for sellers to see their competition. Here’s what I mean: when I go on a listing appointment, I have not only looked at comparable homes that have sold (and, therefore, are not available to see), but I’ve looked at the other properties that are currently for sale that will be competing for buyers with my seller’s house.  In order to determine the best listing price, I take my sellers to tour those competing properties. I warn them ahead of time that I will point out from the perspective of the average buyer what I see as “better” than theirs or “not as good” as theirs–I don’t want to offend them as to their personal taste, but I believe it’s my job to give them objective feedback.  Then, depending on their time frame for selling and their specific needs, we can set a list price that will be most likely to meet those needs. I will also explain to them that when houses have showings, but no offers, it’s an indication that they are overpriced. And, that when there are no showings, that’s the market saying the property is egregiously overpriced. Some related things to know about listing price:

1. What you paid for your house, how much money you put into it and what you “need/want” to get for your house have no bearing on what the market determines its value is. How much your house is worth is measured by what similar things are selling for.
2. You should really concentrate on what your net proceeds will be (after fees and reimbursements, etc.) vs. the sales price as that alone doesn’t really mean much.
3. The first two weeks a property is on the market is when it has the most showings and the most “buzz”. That’s when you want to try to sell your house.
4. Overpricing it and then lowering it six weeks later usually nets you a lower price than you would have gotten if you’d priced it more appropriately at the start, because people “low ball” you when they see it’s been on the market a while–as, clearly, buyers aren’t beating down the doors to submit offers or it wouldn’t still be available.

Many agents will tell you your house is worth more than it is because they know that’s what you want to hear. If one agent tells you it’s worth more than another, just consider that no agent will guarantee that. So think about whom you trust to be more accurate and honest with you–if the lower number is what you’re going to get anyway, does it do you any good to believe you’ll get more only to have to readjust your expectations? And remember the previous point: overpriced houses usually end up going for less and take longer to sell. So don’t be fooled into thinking you’ll get more if you hire agent #2 vs. agent #1 just because agent #2 tells you she would list it at a higher number.

For more, click here.