At Charles Rutenberg Realty, we’ve had a lot of experience with sellers who have thought that their property was worth more than it actually is. When is comes down to it, pricing real estate is not a simple process.
Over-pricing or under-pricing is a huge money-losing mistake. It’s so critical to know your market and get familiar with comps of similar homes currently for sale (and those that have recently sold) to understand exactly what price tag your home needs. Here’s the most common pricing mistakes sellers need to avoid:
- Using a Automated Home Valuation (AVM). Sure, it’s fun to type in your address and see what the “estimated” value is online. But, don’t get caught in the trap of believing that your home is “REALLY” worth what these websites are saying your home is worth online. These websites are using computer programs to come up with the “estimated” value of your home. The problem with AVMs is that they are automated. They don’t take into account the human element, the present condition of a home, its actual size, views, location, improvements, and more. Plus, there’s a good chance AVM’s will not have up-to-date information.
- Price Doesn’t Match Home’s Condition. The biggest turn off to buyers is an over-priced home. Experts say it’s acceptable to reach for the moon when pricing a home if it’s move-in ready and doesn’t need any upgrades or maintenance. A home that requires work and comes with a big price tag isn’t going to generate a lot of interest, let alone bids.
- Emotions Get in the Way. Selling a home can be very emotional. It can be a happy experience, sad or bring back many memories. Don’t let these emotions cloud your judgement when setting a price. Price your home based on it’s condition and the current housing market.
- Pricing the Home without Having A Professional Real Estate Agent Perform a Comparative Market Analysis. There are many things that a real estate agent takes into account when pricing a home. A professional Realtor will complete a comparative market analysis (CMA). If a CMA is completed correctly, a home should sell relatively close to the list price and in a relatively short amount of time. The purpose of a market analysis is to determine a realistic listing price and probable sale price of a home.
- Pricing the Home High because the Seller has Time. Pricing a home high because the seller has time means the house will sit on the market. Homes that sit on the market for an extended period of time begin to develop a “stigma.” Buyers begin to ask questions, such as, “what is wrong with the home?” It’s very possible that there is absolutely nothing wrong with the home, other than the seller is asking an unrealistic price.
Bottom line, price it right, it will sell! If a home is priced correctly, there should be several showings within the first couple days on the market and also an offer in hand soon thereafter.
Joe Moshe at Charles Rutenberg Realty Long Island
Joe Moshe is the Broker/Owner of Charles Rutenberg Realty Long Island, offering 100% commission to Agents. With over 1000 agents, it's one of the fastest growing, most progressive real estate brokerages on Long Island.
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