Pricing Your Home to Sell, Part 1
Consider the two numbers (your price versus the market price) like two stars in a constellation. They may appear to be close enough to depict a shape, but, in reality are light years away. Fail to recognize reality and your chance of a sale may be as realistic as wishing on a star.
In this two-part series we'll look at common pricing mistakes. Evaluate your asking price closely and see if any of these ring true:
Price You Paid Doesn't Matter
A common mistake is to assume that you always will be able to price and sell your home at a number higher than what you paid. Sadly, not true. This isn't even true if you just bought the home last month. Why? The real estate market is constantly adjusting. Numerous factors influence a property's perceived value, including but not limited to inventory, the local economy and consumer confidence.
How Much You Spent on Upgrades Doesn't Matter
Gone are the days of a "dollar in, a dollar or more out" when it comes to upgrades. In fact, in many cases the cost of upgrades may not equal instant equity when you sell. The cost of your upgrades may only serve one purpose: as an "entrance fee" to compete with other houses with similar upgrades.
This can be sobering for anyone who has spent thousands of dollars and expected to see that money reflected in the final sales price. Kitchens are a great example. A "new" kitchen is one that's been remodeled in the last six months. A "new" kitchen completed a year or more ago is actually considered an "updated" kitchen. That's a big difference in perception and in ultimate value.
The more "realistic" homeowners may point to practical improvements as a justification for a certain asking price. Sorry, folks. A new roof may have cost you a lot of money, but on the other hand, do you think you could sell with an old, leaky roof? Some repairs are simply necessary and therefore have little bearing on price except for the "peace of mind" it may instill in a potential buyer.
The one exception to this rule? So-called "green repairs." Repairs and upgrades that will conserve resources (water, gas, electricity, etc.) can differentiate your home in the market. If you've made these upgrades or repairs be sure to highlight them -- they could be worth gold.
Coming in Part 2: More pricing mistakes sellers commonly make and how these can be very detrimental in this market.
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