Like our children, our partners, our pets, our cars; indeed everything about us, we naturally consider them better than others. That horrible house down the street that sold for $1.2 million. Well, your place must be worth $2,000,000 if that’s the case.
Probably the most common mistake made by home sellers is overestimating the value of their homes. It doesn’t matter how much you love your home or how highly you value it, what matters is how much buyers love it.
The minute you enter the real estate market you are in competition with all other homes are on the market. So, unless you are in the rare position of having an uncommonly unique home, you must face the fact that your home is worth what other similar homes in the area are worth.
This does not mean that you can’t get a better price than other similar homes especially when you realise and understand how most homes are undersold. So, if can prevent your own home from being undersold you will instantly get a better price for it.
How to know what price to ask?
Well as hard as it may be, try to be objective and consider the following two factors with regard to pricing.
PRICE TOO HIGH, SELL TOO LOW.
Many sellers ask so much money for their homes that buyers shun those homes. Pretty soon, over-priced homes become known as lemons. And there is only one way to sell unwanted homes – drop the price.
If you start too high – and worse, if you stubbornly hold out for an unrealistic high price, you will almost certainly end up selling too low. Or withdrawing from sale.
A LOWER ASKING PRICE CAN MEAN A HIGHER SELLING PRICE.
You are better off asking too little than too much. Why? Because if your home is slightly under-priced you will almost certainly attract multiple buyers. This can lead to multiple offers which can easily see your home sell above its market price. Provided your agent is a skilled negotiator.
Please note: Never advertise a price that you will never consider. That’s bait pricing which is illegal. Sure, you can change your mind prior to selling but never be deliberately duplicitous.
And here are three ways that you can get a good idea of what price to ask for your home.
1 AGENTS: Call in two, three or four agents (no more) and ask them to sincerely tell you how much they believe your home is worth. Make it clear that you have no intention of choosing the agent who gives you the highest quote; in other words, you will not reward the biggest liar. Once you have received three or four different prices you will have some idea of the price you should be asking. Remember, however, agents do tend to over quote because they are so keen to win your listing.
2 VALUERS: Getting a valuation can be an excellent investment. Valuers have no hidden agendas. You pay them a fee and they quote you a value. Whether you like their price or not is immaterial to them. They still get paid. Generally, valuers are more accurate and honest than agents. If you do not like the valuation, you do not have to share it with anybody. It’s your valuation. You paid for it. It’s confidential.
3 COMPARABLE SALE PRICES. Be careful comparing your home with the prices at which similar homes have been sold. Given that most (about 90%) of homes are undersold you will mostly be comparing your home with homes that have been undersold. Therefore, to get a more accurate guide to the likely selling price of your home, add at least ten per cent to the price at which comparable homes have been sold.
