You Need an Agent Who
Pricing Your Raleigh Home Some Advice From Realtors ®
Curious about how to price your home? For a free home estimate, CLICK HERE. I received this article written by Cathie Ericson for realtor.com. It was so chock full of great information on how to price a home, that I wanted to share it with you. There are some conspiracy theories out there about what works best. I say: you never get a second chance to make a first impression. There are no secrets to pricing a home. Smart buyers are going to use the same information to make an offer that smart sellers use to price the house. They are called comparables (or comps if you like industry lingo!) Price the house properly from the beginning in order to maximize your buyer pool; more demand increases price. Then emotion takes over and people either fall in love with the house or want to win a bidding war. Either way, most people need a mortgage to buy a home and that will only cover the cost for which the house appraises. The difference has to be settled between the buyer and the seller. Read these pricing myth busters from Cathie Ericson for some guidance. Better yet, contact me HERE and get some personal, professional advice
1. You always make money when you sell a home
Sure, real estate tends to appreciate over time: The National Association of Realtors® estimates that home prices will jump 5% by the end of 2017 and continue rising 3.5% in 2018. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live.
The NAR also found, for instance, that the cost of single-family homes increased in about 87% of the metros it studied, but prices actually dropped in 23 markets. So don't assume you'll walk away with a profit until you've examined what's up in your area first.
2. Price your house high to make big bucks
We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you'll soon come back to Earth when you realize that an overpriced home just won't sell.
“While the payday might sound appealing, you're actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home,” says Kathleen Marks, a Realtor® with United Real Estate in Asheville, NC.
While certain buyers might be suckered in, this becomes far less likely if they're working with a buyer's agent who will know all too well when a home is overpriced, and advise their client to steer clear. And this can lead to problems down the road (as our next myth indicates).
3. If your home's overpriced, it's no big deal to lower it later
Sorry, but overpricing your home isn't easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months—or that have undergone one or more price reductions—make buyers presume that something must be wrong with it. As such, they might still steer clear, or offer even less than the price you're now asking.
Bottom line: “Price your home appropriately from the beginning for your best shot at having a quick and easy sale,” Marks recommends.
4. Pricing your home low means you won't make as much money
Similarly, sellers are often leery of pricing their home on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here's why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your home's price past your wildest dreams.
5. You can add the cost of any renovations you've made
Let's say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home's new owners are inheriting all your hard work.
The reality: While your renovations might see some return on investment, you'll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements. Plus that profit can vary greatly based on which renovation you do.
Check out this list of common renovations and their return on investmentto know what you can actually expect.
6. A past appraisal will help you pinpoint the right price
If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It's not!
An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old.
“Since lenders know markets can change in six months’ time, it's important for sellers to understand that a previous appraisal is never a reliable source for the current value of a home,” Marks says.
7. Your agent might overprice the house to make a bigger commission
Don’t even go there, says Realtor Raena Janes of RJHomes in Tucson, AZ.
“While it’s true that an agent’s commission is based on the selling price of a house, the disparity will end up being negligible,” she says. For example, the difference in commission between a $300,000 house and one that's $310,000 is about $150.
“No real estate agent is going to lose a sale for the sake of a couple hundred dollars,” she explains.
Melanie Jones is a real estate broker in Raleigh and the greater Triangle area who is known for her tenacity and passion. The key to her success hinges on one thing: people. Melanie starts every trans....
Latest Blog Posts
As a real estate agent, I subscribe to many newsletters and trade publications so I can analyze industry trends and compare them to our local market. As you have read many times before, The Triangle