Pricing Mistakes Made by Home Sellers

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Pricing Mistakes

Selling your home may be just as pleasurable or miserable as you want to make it; you have more control over the outcome than you may think.  However, it is a challenging exercise.  The potential mistakes are numerous, but some of the most troublesome and expensive involve pricing mistakes made by home sellers.

Almost nothing can bring as much satisfaction as selling a home for your asking price, or maybe even above your asking price.  Those results do happen and they are not miracles; they are evidence of proper planning and execution.  They can be achieved by following a few tips to avoid the mistakes that can cause a different, unprofitable result when selling your home.

Here is a short, but effective list of mistakes to avoid:

Choosing to sell by owner to pocket the sales commission

This sounds like an easy solution: just sell the house yourself, avoid paying a real estate agent’s sales commission and pocket it.  If you have successful experience with this endeavor; good luck and more power to you.  However, the reality for most sellers is the lack of appropriate experience to absorb the tasks handled by a real estate agent.

Selling a home is not like selling vacuum cleaners.  There are reasons why certified realtors have the credentials they proudly and efficiently use every day in the buying and selling of homes.  You may find that it is more time consuming, more frustrating and more expensive to sell by owner than to hire a realtor to perform their complicated duties.

Failure to research home pricing in the neighborhood and current market

Some home sellers will insist that their home is worth their original purchase price plus a percentage increase for each year of ownership plus all the improvements made in the home and on the property during ownership.  These are realistic assumptions, but all of them have conditions applied that will modify the value of your home.

The first consideration is the value of other homes like yours in the neighborhood.  This is best determined by the actual sales figures for those homes and not just the asking prices or the tax assessment values, although these factors may influence the market value of your home.

The relative condition of the housing market is another factor to consider.  Through the duration of your home ownership, you might have been sensitive to the continuous fluctuation of the real estate market in your area.  That fluctuation drives the potential sale value of your home; you cannot expect that home values will continuously rise regardless of market conditions.

Failure to negotiate for the sale price you want

Considering the market fluctuation noted above, you may find that determining an appropriate asking price for your home is a challenge.  This is one of the advantages of hiring a real estate agent to assist in establishing a marketable sale price.  If the market favors sellers, that is, if there are fewer homes on the market than there are buyers, that competitive condition alone may allow an increase in the asking price.  The alternative condition restricts the freedom of a higher asking price.

It is possible, in a seller’s market, to entertain bids that are higher than your asking price; an ideal situation.  However, in a tighter market, if the price you are willing to accept is variable, you may find it advantageous to ask for a higher price and then negotiate down to an acceptable price for both seller and buyer.

Becoming emotionally involved

This is a dangerous situation, particularly if you have engaged the first mistake to decide to sell by owner.  There is no one to act as a convenient foil to keep reality in mind as you go through the sales process.  However, even if you hire a realtor, it is possible for you to become so attached to the home you are trying to sell, you begin acting like you really do not want to sell.  Or you may think that an offer brought to the table from a buyer is unrealistic considering all you have put into the home.

You may have thrown your entire life into the home, but once the decision or necessity to sell the home becomes a reality, it is time to ignore your personal involvement in the home.  It is just a commodity which you will hopefully replace in short order.  Good bye and good luck ought to be the only sentiment you offer to your house.

Final thought

If you avoid trying to sell by owner, failing to research the market, failing to negotiate a fair price and becoming too emotionally attached, you have just eliminated the  greatest obstacles against making the sale of your home a pleasant experience.

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