Correct pricing on day 1 is very important if you want to maximize your return on investment when you sell your home.
No matter what you want to sell your home for, no matter what you paid for your home or for the upgrades you made, no matter what your helpful neighbors tell you your home should sell for, the ONLY thing that determines value is what another person is willing to pay for your home. Too obvious? Maybe not.
As I meet with sellers thinking about selling, most work hard to show me that their home exceeds the value of other similar homes in their neighborhood. We all feel that our home is special for a long list of reasons. And it is special - to us - but it is a commodity to the buyer.
Studies show we all tend to overestimate the value of upgrades, repairs and the “intrinsic” aspects of our own homes. That is normal. We have invested time, money and emotions in our home. That is why an unbiased 3rd party can help. That is why you need an experienced agent on your side helping you focus on the goal of getting you the best possible return on your important investment.
Put yourself in the shoes of the buyer as you get ready to sell. How would you look at your home as a buyer today?
In large part, buyers shop for homes just like they shop for anything else. They see every home as a commodity. Your home is a product on the shelf sitting next to may similar products all fighting for the attention of the buyer.
As a commodity, pricing is a top priority. A simple price per square foot comparison to other homes of interest is often the measure the average buyers use. Buyers are just simple comparison shoppers, looking for the perfect home at the right price. In reality, to the buyer, your home is not a home ... yet - it is a "house" that they may want to make into a "home".
What about upgrades and repairs? You have done a great job adding value by doing a few upgrades. You always keep up with maintenance as well. Do you get credit for that? Of course. But, most sellers are surprised that the credit is usually far short of the investment costs and maintenance efforts.
Buyers see kitchen upgrades as positive, old roofs as negative, and swimming pools as either negative or positive, depending on their needs. If maintenance is poor, you get a deduction in the mind of the buyer. If maintenance is good to great, the buyer sees that as close to neutral - not usually a big plus. If they like the style, they give bonus points. If they think the neighbors are too close or the neighborhood association is a bother, they subtract.
While great care and upgrades can influence your home's valuation, and can certainly help with the speed of sale, by not overestimating the value of these improvements, and accepting that good maintenance is simply expected (such as having a good roof or a well maintained yard), you will do a better job targeting the correct market value for your home.
Knowing how buyers think about the home valuation process is important to you as a seller because much of home shopping begins by narrowing the field by price first. The set of buyers most likely to purchase your home may never notice your home if it is above their search threshold as a "just listed" property.
It is critical to price correctly right away. Avoid the temptation to "test the market" by overpricing to "see what happens". Buyers today are well armed with data. Very few will overpay but many potential buyers will miss your listing during the critical first few days if it is above where it should be priced.
Overpricing can extend time on market, result in a stale listing, and may even cost you a substantial amount of money. And, of course, underpricing can also be an expensive error. Correct pricing involves more than math. It also takes a thorough understanding of a dynamic local market and an understanding of how to value the unique differences among competing homes.
You should definitely enlist the help of a pro to help you with pricing. It is far too important to rely on anything less than a carefully prepared professional pricing analysis when putting your home on the market. I can do that for you. Call me today!
Your Charleston Realtor since 2001