REAL ESTATE PRICING TRAPS
What does your home value at? What would a prospective buyer be willing to pay for your home?
When selling a home FSBO (for sale by owner), sellers often badly miscalculate the true value in today's market. They have no idea what their home should value at, so simply think up some ridiculous figure in the hope that someone will rush in and pay their grossly inflated asking price. Truth is; if you price your home too high it may take a long time to sell. The house might start to look “shop-worn”, as it sits on the market waiting for a buyer that may never arrive. If this happens you’ll no doubt get discouraged as you continue to pay your mortgage loan, taxes, house insurances etc. When you do finally reduce the price, you may have to sell your property for less than you would have, if you had set the right price in the first place. The point is; most real estate buyers will want to know how long your home has been on the market. If it has been for sale for some considerable time, then the buyer may think something is wrong with it, or that you are desperate to sell --- which you might be. On the other side of the coin; if you price your home too low, you’ll get thousands of dollars less than you would have if you had done your homework by knowing the true appraised market value. So, when selling your home FSBO, it pays to do some research rather than simply guessing the value.
Look around to see what similar homes in your area have SOLD for, ask some real estate agents to value your home, or consider contracting a real estate appraiser to give you a more accurate market appraisal.
Here are 4 real estate pricing traps to watch out for:
Real Estate Pricing Trap 1.
This can be a BIG trap! Many homeowners price their home based on what some other homeowner is asking down the street. Your neighbor can ask a million dollars, but it doesn’t mean to say they’ll get it. The asking price is NOT the selling price. Base your price on what the market will stand, not on some ridiculously inflated price that some neighbor might be asking. People tend to exaggerate when talking about the fantastic “deal” they pulled off. It’s an ego thing. So, be wary if a neighbor tells you they sold for ________ dollars. Work on facts, not fiction.
Real Estate Pricing Trap 2.
Forget about what you paid for your home – it has no relevance to the current value or what it might realistically sell for in today’s market.
Real Estate Pricing Trap 3.
Take care valuing your property based on your Tax Assessment (sometimes called Rateable Value), plus some magical percentage added on for good measure. Depending on where you live, Tax Assessments can be quite different from the true market value.
Real Estate Pricing Trap 4.
What you “want” or might “need” in monetary terms from the sale is irrelevant. This has no bearing on the market value. A buyer will not be interested in your personal circumstances. Your home is only worth what someone is prepared to pay for it, which in most cases will be the true market value. At the end of the day, price will determine how quickly your home sells. If you need to sell your home in a hurry, then in most situations, you will need to price it at or below the market value. If time is not so critical, then you can try to get full market value or above. A good real estate marketing campaign can only do so much. Price will determine how quickly your property sells.
For Sale By Owner
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