When it comes to selling your home, one of the most important things to get right from the beginning is the asking price
If the asking price is set too high, your property will languish on the market and you will be forced to reduce the price, possibly multiple times. If the asking price is set too low, you risk losing money that could have gone into your pocket.
According to realtor.com (If You Don’t Price Your Home Right, You’ll Really Pay: Beth Braverman | Nov 12, 2015), here are five common mistakes to avoid when pricing your home.
1: Basing your price on how much you paid. Even in lackluster markets, homeowners can’t help but hope they’ll make a big profit when they sell. The harsh reality is that buyers could care less how much you paid. All they care about is getting the best deal possible in today’s market and they don’t care how much you owe on the mortgage – so don’t factor into your asking price.
2. Expecting to get reimbursed for renovations. Remodeling projects offer an average 62% return on investment, according to Remodeling magazine, which is why it’s a good idea to skip major cosmetic remodels right before a sale. This is particularly true if you’ve got wild or exorbitant tastes that buyers might not share.
3. Not shopping your competition. While you might assume your home is more or less the same as others on your block, small differences can add up to big discrepancies in price. Take time to peruse local listings and attend open houses to figure out how your home stacks up.
4. Getting emotionally involved. All sellers think their home is worth more than it is. Just because you raised a beautiful family in your house doesn’t mean potential buyers will see themselves doing the same, or that they’ll pay a premium for the opportunity to do so.
5. Failing to quickly and decisively reduce. If your home goes several weeks without an offer, it’s likely priced too high, particularly if homes in your area have a relatively short average days on market. Rather than making a small price cut and risking having to do it again in a subsequent month (while your listing gets older and staler), make a large and decisive price cut—$10,000 or more—that will attract buyer attention and show you’re serious about selling.