How Overpricing your Prescott Home can Lose you Money
Are you ready for the ‘Realtor’ truth bomb? The most common reason we find in real estate (or any market for this matter) from the lack of a sale, is directly interrelated with pricing. Are there ways to resolve this issue without directly affecting your bottom line? Well, the answer is yes and no, and it may depend on the home. Let me explain about pricing and how incorrect pricing a home can affect a successful sale first. One of the worst things a homeowner can do is put their property on the market with bad information and prices it incorrectly. Anytime a home is incorrectly priced, that home will attract the wrong buyers or even worse – get none at all. However, if a house has been shown to a number of prospective buyers without any offers or interest, it can be safe to assume the market is telling you the price is too high. Some sellers will say, well why didn’t they submit a lower offer? Truth be told, that price point probably has better quality homes that they are looking for and something is missing from the equations to make a buyer want to even make an offer. There are often times extenuating circumstances that prevent a house from selling. These include and are not often limited to a home being dated, being located too close to a busy road, and in a lot of cases, an undesirable floor plan that doesn’t work for the buyers needs. Conversely, if a home doesn’t receive any showings (or only a few) it can indicate a few other things. Yes, the real estate agents marketing can be partially the culprit if they’re taking amateur pictures that show-up really dark and the home looks really cluttered. Or, things that show up in the pictures that are outside of the Realtors control. For example, crazy colored carpets, dated wallpaper, holes in walls and the overall condition of the home can also play a role and will be discussed later. More often than not, pricing is still the main culprit for lack of showings. When it’s all said and done, in today’s market, the price of your home can be more than 75% of the marketing. What does that mean? Simply put, if your home is overpriced, no amount of marketing or real estate agent work will bring buyers to your home that make an offer. Just remember, lack of activity indicates overpricing and not matter the condition, the home will sell if it’s priced correctly. All of the advertising and marketing in the world cannot help an overpriced home sell.
The Value of a Good Realtor
There is one other very common issue I see with pricing a home correctly. As a Realtor, I have heard sellers tell me a number of times that they need ‘X’ amount and don’t care how long it takes on the market to get their price. I don’t know where it comes from, but some sellers believe time is their friend when in fact time can be your biggest enemy. These types of sellers think they can wait until the right buyer comes along and they get their price. This rarely happens. If a person doesn’t have to sell, then they can try this strategy. In my experience, this usually ends bitterly and with unhappy experiences. For example, if you’re waiting for values to go up, wouldn’t you rather be in the home you want, while waiting for appreciation? Sure you might take a loss now, but moving your equity into another location and home may be the best move for your family at that time. Especially when it comes to quality of life with being closer to family, commuting to jobs, or just finding a home that makes the family happier.
How do you know what price is fair and ensure you’re not giving the home away? Well, this comes down to having a good real estate agent, but here’s some helpful advice too. The price of your home should be evaluated with homes that are similar to yours that have sold recently, rather than picking and choosing homes that are from different areas or still on the market. Whatever price your neighbor is asking is just that, an asking price and not a true indicator of value until their home has sold.
While your home will more than likely sell for real market value, by using this strategy of pricing it closer to selling prices, not asking prices, will help it sell faster. Start by choosing a knowledgeable and experienced Realtor who understands market conditions. Depending on how long you have had your home on the market or lived in your home, market conditions may have changed. For example, more homes have probably sold, additional homes are now on the market and the mortgage rates may have shifted up or down. Make sure, anytime you put your home on the market that you get an updated competitive market analysis. Market conditions can change quickly and a good real estate agent will keep you updated on market trends.
Thank you for reading.
Donny Karcie, MBA
731 W Gurley Street, Prescott, AZ 86305