Putting yourself in the right mindset to sell is essential. It’s the most difficult aspect of selling for most sellers. Your home is worth what a buyer is willing to pay, which may not be what you think it is worth.
Detaching yourself emotionally from your home is difficult. Clearing out years of clutter, depersonalizing your home by removing personal memorabilia, and staging your home for sale can help you step back and view the home as a commodity that needs to be sold rather than as your personal sanctuary.
Putting your home on the market at a price that reflects what you want and not what the market will bear can cost you time and money as it sits on the market unsold.
The home-sale market is a localized phenomenon. The only way to get a clear picture of what your home is likely to sell for is to find out which listings are selling in your neighborhood and for how much. The most recent sales — those that closed within the last three months — will be the most informative. Be sure to take a hard look at the list prices of homes that are new on the market.
If the list prices are lower than they were two or three months ago, this indicates that prices are declining. This needs to be taken into account when you select a list price.
HOUSE HUNTING TIP: Pay close attention to your competition. Don’t fall into the trap of pricing your home higher than your neighbor’s home because yours is better. If your neighbor’s price is too high for the market, neither of your homes will sell.
Ask your listing agent to call the listing agents of properties similar to yours to find out what kind of showing activity they are receiving. Have they had offers? If so, why weren’t they accepted? Were the offers too high? If so, you should set your sights lower.
Some listing agents recommend that you list considerably under market value in order to stimulate multiple offers. In some cases, this can be an effective strategy.
For example, in the low-end foreclosure market, this was common practice at the end of 2009. Some listings priced way below market value received more than a dozen offers.
However, it can be risky to price significantly lower than market value on a more expensive property for which the demand is lower. You could end up with more than one offer, but you could also receive under-market price offers.
Your home needs to be perceived as a good value to a buyer to sell in this market. However, you could shortchange yourself by discounting the price too much.
Your home is most marketable when it is new on the market. Buyers wait anxiously for the new crop of listings. Listings that don’t sell relatively quickly often languish on the market.
Price reductions often follow as the sellers try to find market value. A listing that has been on the market for months is likely to receive a low offer — if a buyer makes any offer.
A listing that receives a lot of showing activity when it first hits the market but gets no offers is probably overpriced for the market. In this case, it’s best to lower the price to market value as soon as possible while the listing is still fresh in agents’ and buyers’ minds, even if this is within two to four weeks of the listing date.
Listings in neighborhoods where sales activity is slim require a longer marketing period. Even so, pricing right for the market is imperative.
This article is from Dian Hymer, a real estate broker and nationally syndicated real estate columnist and author.