If you’re like many people thinking about selling your home in Knoxville, you know that pricing is important. Your REALTOR® has probably already told you that you have to price it properly right out of the gate; if you don’t, you’re either going to leave money on the table or fail to sell your house. But there are a lot of home pricing myths swirling around the internet, and a lot of people fall prey to them. Here are three of the most common home pricing mistakes that trip people up so you can avoid them.
3 Common Home Pricing Mistakes That Cost Sellers Money
These are some of the most common mistakes people make:
- This website says my home is worth $X, so that’s what it’s worth.
- I feel like people will appreciate these features about my home, so it’s worth more than my agent says it is.
- Pricing high and letting people negotiate the price is the best way to make more money.
Here’s a closer look at each of these – and why thinking any of these things will cost you money when (and if) you sell your house.
Home Pricing Mistake #1: This website says my home is worth $X, so that’s what it’s worth.
The biggest home listing sites – you know which ones we’re talking about – often list a home’s “worth,” even when the home isn’t currently listed for sale. In fact, a lot of people start looking at those websites when they’re considering selling their own homes, just to see how much other homes in the neighborhood are worth.
The problem is that those estimates can be off by as much as 18 percent, on average. On a $200,000 home, that’s a huge $36,000 range in either direction. That means when you see a home on a major real estate website and its page says it’s worth $200,000, it could be worth anywhere between $164,000 and $236,000. (If the “worth” is higher, the range is even bigger. A $300,000 home could actually be worth between $246,000 and $354,000!)
The reason is simple: Algorithms, not humans, perform the calculations. They don’t account for things like the worth of other homes up the street, whether new homes are being built in the area, whether a highly rated school district is nearby, or even whether you just had a backyard irrigation system installed. The only way to get an accurate price for your home is to talk to a real estate agent who can account for every factor.
Home Pricing Mistake #2: I feel like people will appreciate these features about my home, so it’s worth more than my agent says it is.
Sentimental value is not the same as monetary value, but many sellers fall into the trap of believing that their attachment to the home is worth cash. And even the best features – or, rather, what you think are your home’s best features – don’t always convert into dollars with buyers.
The bottom line is that your home is only worth what a buyer is willing to pay for it. That’s why having a real estate agent perform a comparative market analysis on your home is so important – your agent can let you know what people are willing to pay for homes like yours, in your specific area, so that you can meet those buyers where they are.
Home Pricing Mistake #3: Pricing high and letting people negotiate the price is the best way to make more money.
Overpricing your home is a big problem – but perhaps not for the reason you think. Most people start their home searches online, and when they do that, they set specific price parameters. If someone knows he or she can spend around $300,000 on a home, that’s where they’ll look – no higher, no lower (especially if they’re preapproved for a loan and know exactly how much they can get from the bank). That means if your home is priced at $310,000 when your real estate agent has told you it’s worth $299,000, the buyers searching online won’t even see it; they’ll assume it’s out of their price range.
The people who do see your home – those searching in your price range – will compare your house to other houses that are competitively priced. Unfortunately, yours is going to come up short when compared to homes with prices that match their value.
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