Have you ever lived near a home where one of the homes for sale seemed to sit on the market forever, with fewer and fewer people looking at it?
It looks like a nice enough home, right? Lots of curb appeal, and you’ve seen the interior, so you know that it’s delightful. Why isn’t it selling?
In a word: Overpriced.
Even worse, if the home was originally overpriced and has gone through a series of price reductions, the home is stigmatized. This means homebuyers think there is something wrong with the house, and most of them won’t even bother to look at it.
If you’re thinking of selling your Southern Maryland home and want to “experiment” with pricing, watch out for these three common home pricing mistakes.
Pricing too high out of the gate
It’s common knowledge in the real estate industry that overpriced homes take longer to sell. Don’t take that to mean that you’ll eventually get your price because if you’re overpriced, you won’t.
In fact, you can plan on making 5 percent less than your listing price if your home sits on the market for two months with no offers. At today’s national average home price, 5 percent is more than $14,000. And unless you overpriced the house by that much, that loss has to hurt.
Even worse, according to a March 2012 study performed by MIT’s Center for eBusiness, homes that sat on the market substantially longer than average suffered a $32,000 reduction in the eventual sales price.
If this isn’t enough to show you the importance of pricing the home appropriately when it goes on the market, I don’t know what is! The first lesson in real estate pricing is this: To realize the most money you can from the sale of your home, price it right from the start.
Relying on online home price estimates
You can admit it: You’ve checked your home’s Zestimate at Zillow.com, right?
It’s OK. Everyone does it. But, unfortunately, many Southern Maryland homeowners do that and don’t understand that there is no way anyone can make an accurate estimate of market value without having seen the home. And, since sites like Zillow don’t have access to all of the MLS listings and, most significantly, the sold listings (which is what market value is based on), their algorithm is faulty.
The company admits that its “median error rate” is about 8 percent, according to Kenneth R. Harney in the L.A. Times.
Harney goes on to remind us that 8 percent is the national error rate and, because all real estate is local, the rate varies by region. “In Somerset County, Maryland, the rate is an astounding 42 percent,” he continues.
There’s only one way to truly know how much your home is worth: Have it professionally appraised. The second best way is to ask a real estate agent like me to compile a comparative market analysis (CMA).
Since agents use many of the same techniques as appraisers, they typically match or come quite close to the appraised value of a home.
Basing your price on your neighbor’s asking price
When you consider putting your Southern Maryland house on the market, it’s only natural to want to know what your neighbors are asking for their homes. Remember, though, that this figure represents what your neighbor hopes to get for his home, not its actual market value.
The true market value of a home is based on what buyers actually paid for nearby homes that are comparable to yours. Think of the list price as “fantasyland” and the sales price as reality. To that end, I try to dissuade my home-selling clients from basing the price of their home on some pie-in-the-sky figure that may not reflect reality.
Determining the value of your Southern Maryland home includes far more than checking sales prices. I am happy to show you – at no obligation — what I do to determine the current value of homes and to provide you, free of charge, an analysis of your home’s value. Call me any time.
Leonardtown MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309
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