Do not fall into these common pricing mistakes with your property
Selling your house can stir up mixed emotions. You’re excited to move to a new place, but a little sad to leave the old one behind. You’re also challenged with getting the house ready to sell, which brings up a whole new set of tasks you’re probably not very familiar with. One of the trickiest: pricing your real estate.
Pricing is very easy to get wrong if you rush it, or if you don’t do your research. Over-pricing can make it difficult to find buyers, while under-pricing won’t get you a fair amount of money from the listing. It’s important to know the appropriate pricing for your home to avoid these outcomes.
In an effort to help you sell your house at just the right price, we’ve created a list of the six most common pricing mistakes in real estate.
1. Setting the sales price based on the money invested in the home
Simple updates to the home, such as new paint or refinished floors, usually provide a high return on investment. These are usually on the cheaper side of home renovations, and give a fresh, ready-to-be-lived-in look buyers want.
Bigger updates, such as a full kitchen remodel or the addition of a swimming pool, are less likely to see a complete return on investment because they are costly and done to satisfy the owner, not necessarily to add value to the house.
Don’t base your sales price on the dollar-for-dollar amounts put into your home because you likely won’t get it at sale.
2. Pricing home maintenance as home improvement
Home maintenance and home improvement are both related to making the home more functional, but the two aren’t to be confused when pricing your house. Most buyers expect a house to receive proper maintenance–working utilities, house and lawn care, etc.
But home improvements, such as a bathroom renovation, are typically more costly. Pricing home maintenance as a home improvement can raise the price above what it should actually be, which may drive buyers away.
Do remember that some home improvements have a better value when it comes time to sell than others. Like bathrooms and kitchens!
3. Pricing quantity over quality in square footage
It’s not always true that big houses cost more than small houses when you take the quality of the house into account. A smaller house that is well kept and full of upgrades will sell for more than a larger house that requires a lot of renovations. Price your house with its quality in mind and you’ll see a more realistic profit.
4. Ignoring your floor plan or layout
The floor plan or layout of your house may affect the selling price if it’s difficult to maneuver or doesn’t have a good flow to it. For example, houses with floor plans that are more closed off are less desirable than those with open layouts, as open layouts make it easier to get around and make the space feel bigger. In this case, the house with the open layout could sell for a higher price.
5. Pricing your home based on your financial needs
Basing the price of your home on how much you need in order to buy another home or to pay off loans or debts likely won’t work in your favor. If the price is too high, the chances of it attracting buyers is slim. Focus more on the actual value of the house than on your needs if you want a chance at selling.
6. Relying too much on appraisals
An appraisal, or online estimate, can be a great starting point for pricing your home, but that doesn’t mean it should set the exact selling price. Appraisals focus more on things like square footage, number of bedrooms and bathrooms, and size of the lot, and less on the quality of space, flow of the floor plan, and the house’s location.
These less focused on aspects are what many buyers consider most important. This is why an appraisal should be considered in pricing, but more than the appraisal should be taken into account.
It’s easy to make mistakes when pricing real estate. We want to help make it a bit easier. If you’re interested in knowing your home’s value in today’s market, fill out our form for a free Comparative Market Analysis!
Selling your current home and searching for another? See our resources for homebuyers including our homebuyer’s favorite, Guide To The Top Questions Your Realtor will Ask You which has helped buyers of all types prepare for their first buyer/realtor meeting!