SERIOUS ABOUT SELLING YOUR HOME? SOME PRICING MISTAKES TO AVOID
By Barbara Laken and Annie Alexander
If you’re thinking of selling your home or condo this Spring, one of the most important decisions you’ll have to make is what price to place on your property. As you do, keep in mind that the largest number of potential buyers see your home within days of it being posted on the MLS. If your home is overpriced, you’re missing out on this a hugely valuable one-time opportunity – and probably helping to sell your more smartly priced neighbor. In Part One of this Two Part series, we’ll address some of the common oversights and misperceptions that contribute to overpricing.
FOLLOWING THE LEADER:
Many sellers base their listing price on list prices of other properties in the neighborhood. The reasoning goes, “if the Smiths are asking X for their place, then our house has to be worth at least that much – or more!” On the surface, this strategy seems reasonable enough. But using other area asking prices to establish the value of your home can be a costly mistake – especially if the homes you choose to model your own pricing strategy after are overpriced.
AB HOMES INC. SAYS…
Be sure to look at the market time of houses or condos whose pricing you want to emulate. Properties that have been on the market for six months or more, or on and off the market several times, are probably overpriced, poorly staged, or both. A more productive pricing strategy is to see what properties in your neighborhood or building have sold for in the last six to eight months. And if you live in a condo, remember, your comps are only properties in your building or townhome complex – not condos in buildings down the street, under construction or in your general neighborhood.
IT’S THE ECONOMY, STUPID:
And not only when you’re running for office… Because the housing market, like the larger economy, is dynamic, not static — what comparable properties sold for last year may not necessarily be predictive of what your property is worth today. Many sellers overlook changes in interest rates, property supply, employment availability, school quality and generational preferences — which constantly merge and re-combine, influencing property values on an ever fluctuating continuum, when pricing their homes. Keep in mind that many of these variances can be highly localized, as we’ve seen here in Chicago, where industrial zones and run down parts of town have blossomed into some of city’s hottest neighborhoods, often at the expense of more established areas.
AB HOMES INC. SAYS…
Pay careful attention to current market statistics before placing a price on your home. Prices for comparable sold properties, the number reductions taken before sale, and market time are all good indicators of market strength and pricing viability.
- Next Week: What Statistics Tell Us About the Importance of Pricing