7 Tips In Pricing a Home

7 Pricing Myths to Stop Believing If You Ever Hope to Sell Your House (also in selling land and business)

  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. This always depends on if it is a seller’s market or buyer’s market.

  1. Price your house high to make big bucks

I 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.  And this can lead to problems down the road (as our next myth indicates).

  1. 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.

Price your home appropriately from the beginning for your best shot at having a quick and easy sale.

  1. Pricing your home low means you won’t make as much money

Similarly, sellers are often leery of pricing their homes at market value. 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 contingencies in favor of the seller.

  1. 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. It all depends if you are adding to the original value of the home or if it is maintenance (like if I were fixing kitchen countertops that needed to be fixed).

  1. 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.

  1. Your agent might overprice the house to make a bigger commission

Don’t even go there, 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.  For example, the difference in commission between a $200,000 house and one that’s $210,000 is about $150. No Realtor is going to lose a sale for the sake of a couple hundred dollars.