"The importance of an appropriate asking price cannot be overstated."
Too High: There are several dangers of pricing you home too high and it is one of the most difficult things to convince sellers without extensive real estate experience.
One of the best ways to feel confident with your asking price is to "shop" for a home in the price range you've decided on. For example, if you plan to ask $200,000, "shop" for a similar home in the $185,000 to $215,000 price range. Consider both new and pre-owned homes both inside and outside of your neighborhood.
Buyers shop extensively and rarely shop only one neighborhood. Many times they visit 20 or more homes before making a decision. If your proposed asking price is too high (or low), it will become apparent when you "shop" around. Buyers are very savvy and want to get the most home for their hard earned money.
Don't Fall into the Pricing Trap
Sellers obviously want to get the most out of their property when selling. Please be aware that ready, willing, and able buyers and sellers decide on the eventual purchase price. Don't fall into the trap of ... what you "need" to sell your home for ... vs. what the market will bear. Getting top dollar for your property relates more to preparing your home for sale
Over-Priced Homes produce less showings
Pricing a home too high targets the wrong buyers. If a home's market value is $200,000 and the seller decides to ask $245,000, buyers looking for a $200,000 home won't even see the home. The seller's home will either be priced too high for the buyers or they will be considered an unrealistic seller. Buyers who do make it to the overpriced home are likely to be disappointed because they are looking for a more expensive home.
Over-Priced Homes result in a longer marketing period
Another pitfall of overpricing a home is the marketing time is usually longer, which in turn leads buyers and Realtors to ask, "what is wrong with the home?". Many will conclude that the seller is unrealistic and thus difficult to deal with (yes, this point is repeated for emphasis).
Over-Priced Homes often result in a lower sales price
The irony behind over-pricing a home is that, because it sits on the market for longer than necessary and becomes "stigmatized", the seller eventually ends up lowering the price to where it should have initially been and often lower than it would have been if it was accurately priced from the beginning. Unfortunately, this is a very common frustration for sellers.
The main thing to remember is that over-pricing your property, often leads to a lower sales price and a more lengthy marketing time.
Too Low: An asking price that is too low usually produces a quick sale. The drawback to underpricing is obvious ... you can get more.
When do you price a home for a quick sale?
I've witnessed my fair share of foreclosures. The primary reason for most of the foreclosures was that the sellers "had to" get more out of their home; i.e. they were "upside down". If a home owner misses three house payments, the lender will usually start foreclosure proceedings. If you are in danger foreclosure and would like to avoid all the negative consequences, you must act quickly and accurately price your home. Lien holders are not quick to forgive the homeowner of the deficit if they foreclose on a home. Bankruptcy can be even worse. Lenders will often entertain a Short Sale prior to foreclosure. This type of sale can get quite complicated. If you or someone you know is in danger of a foreclosure and have questions about a Short Sale, please do not hesitate to call.
Just Right: An accurate asking price based on current market conditions is the best way to get the highest price for your home in the shortest period of time. It will produce the highest number of lookers and often results in multiple offers especially in a "hot market".
If you have any questions, please feel free to call me direct. I have extensive real estate and appraisal experience and I'm happy to provide a FREE Market Analysis
Thank you for visiting today. If this is your first visit, take your time and look around. I have plenty of information and resources available to you. If you are a return visitor, thank you. I would love to hear from you and tell you how I can serve all your real estate needs.