What Mistakes do Sellers Often Make When Choosing a List Price?

Posted by on Friday, May 17th, 2019 at 10:43am.

Mistakes Sellers Make When Pricing Their Home When it comes to selling your home, setting an asking price can be a daunting task especially if you aren't familiar with this type of area and have no experience with real estate. Most homeowners don't trust themselves to set an asking price when selling their home but owning a property can help you realize the value of your home especially if you have put in extra work.

The one thing that makes the situation more complicated is there are several other houses on the market that are similar and may be asking more or less than what you should are. This can make it confusing as to where your starting point should be. If you're working with an agent, they want you to list at a higher price which can be hard for you as you'll notice your home is on the market for an extended period of time than if it were listed at a lower asking price.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

It's Not about What a Seller Needs or Wants

The first mistake made is setting a listing price based on what you want or need. When it comes down to it it's all about the value of the home and not what the seller wants or feels they deserve. Sales prices of homes are not based on the needs of the seller and market value is what dictates the selling price of the home. If a buyer relies on financing they need to have the home appraised and see what the home is actually worth.

Basing Sell Price on Neighbour Sell Prices

One thing you should never do is compare your asking price to what neighbours are asking. Each home offers different features and the more upgrades and pristine shape the home is the more asking price they can ask for. If you have up kept the home but made no major improvements you need to start at a smaller asking price.

Real estate agents base a selling price on a few different factors such as what the home should be listed for in the same area as well as the sales price a buyer wants to pay. They also go based on what the appraised value of the home is and what a bank will give a loan on. You want to establish a price that's going to attract buyers to your home and while it may not sell for as high as you want, you want to have a marketable and competitive price that will have buyers interested in making offers and following through.

The Danger of Overpricing and Reducing

Overpricing a home is an easy mistake to make. Many homeowners have a hard time judging the market value of their house, because of their lack of expertise in the real estate market and their attachment to their property. Homeowners who price their home too high will often find that they cannot sell their property.

After a home has stayed on the market for a while, the homeowner must reduce the price to attract buyers. This puts the seller in a bad position when a buyer is ready to make an offer. Knowing the homeowner was willing to drop the price once, many buyers will try to negotiate an even lower price.

The end result of overpricing a home is that the home may take longer to sell than if it had been priced properly. Often, overpriced homes will fetch a lower price than if they had been priced properly from the beginning. Home sellers who want to avoid this problem should consult with a knowledgeable real estate professional at the start of the selling process.