Why You Should Never Overprice or Underprice Your Home
Selling a home provides many challenges, especially in a slower market. Sellers need to balance a lot of factors in order to ensure that their home is appealing to buyers, and one of the most important decisions is the price of the home. Balance is essential in a price because if it’s too high, no one will buy the home. And if it’s too low, the seller is losing out on profit they should be receiving. When pricing a home, sellers need to be careful to pick the right price from the very beginning. Here are three reasons why.
High Prices Won’t Sell
As briefly mentioned earlier, if the home is priced too high, it just won’t sell. In many cases, buyers won’t even come to home showings if they think the starting price is too high because it leads them to think that the homeowner will be difficult to negotiate with. Homeowners should try to price their homes competitively to help get the attention of buyers. Plus, if multiple buyers decide they want to purchase the home, they may even drive the price up a bit by trying to outdo each other's offer. And even if that doesn’t happen, a sale at a fair price is a better result than no sale at a higher price.
Low Prices Make Buyers Suspicious
On the opposite end, prices that are too low can also put buyers off. Sellers may underprice their home if they want to make a fast sale because low prices attract buyers in theory. However, this can potentially backfire on the seller, because if they choose a price that is too low, then buyers may become suspicious that something is wrong with the home. When a price is too low, buyers may start to think that the seller is hiding something from them in order to make a sale, such as foundation damage or infestation that they don’t want to deal with. While everyone likes bargain hunting, too much of a bargain can inadvertently turn buyers away.
Inaccurate Prices Interfere in Search Results
When looking for a home, buyers are most likely going to turn to multi-listing websites for their preliminary searches. These websites give users a way to narrow down their search results, and one of those ways includes submitting a price range. If a user is looking for a home for around $200,000, they may put their search results to show every home priced from $190,000-$210,000. However, nothing above or below those amounts will show up in the search. Homeowners who are overpricing or underpricing their home will be missing out on a lot of the people they want to target, lowering their chances of finding a buyer.
Pricing a Home Fairly
It can be difficult to come up with the right price for a home. In order to get the right balance, homeowners can do a few things. First, they can have their home professionally appraised. An appraiser will come to the home and inspect it thoroughly in order to come up with a fair price for it. Homeowners can also do their own research online by looking for similar homes and seeing how they’re priced to get an idea of the market. And as always, sellers should always work with a skilled real estate agent. Agents are able to pick up on the nuances of the housing market and recommend a price better than an untrained homeowner.
Pricing a home is one of the most important parts of selling a home, so homeowners need to be aware of how it can affect their sale. Being aware of this ahead of time can help sellers avoid the mistakes.