5 Home Pricing Myths: A Seller's Guide to Real Estate Pricing Strategies
Pricing a home is more of an art than a science, and it's a delicate balance that often involves navigating through various myths and misconceptions. In this blog post, we'll delve into the top 5 pricing myths that sellers commonly believe, providing insights and debunking misconceptions to help sellers make informed decisions.
Myth 1: The higher a home is priced, the better chance a seller has of getting close to their asking price
One of the biggest myths in real estate is the belief that pricing a home higher guarantees a better chance of achieving the asking price. In reality, this often leads to missed opportunities and a loss of valuable marketing. Overpricing can result in extended days on the market, making it crucial for sellers to set a realistic initial price.
For example, The Smith's decided to list their property significantly above market value, believing that it would attract higher offers. However, potential buyers are deterred by the inflated price, leading to limited interest. All of their open houses were empty, there were no calls for appointments, and the property stays on the market for an extended period. When the price is reduced to a reasonable level, the initial momentum is lost and the home continues to sit. Wah wah.
Myth 2: I don't need to stage an empty house, buyers will use their imagination!
No buyer, unless they are a designer or a stager, has the imagination to dream up filling an entire home. Staging creates the vibe, mood and acts like an extra jolt of energy. Staging an empty home helps to sell a home faster and for more money than leaving it empty.
Myth 3: Including "extras" like the planters or furniture with the sale helps to negotiate a higher price
Nobody wants your old couch! Attempting to bundle personal belongings with the home sale can backfire. Buyers may not value these extras as much as sellers anticipate, leading to counteroffers and potential disappointment.
Say a seller offers to include high-end furniture and new appliances in the home sale, expecting it to justify a higher price. The buyers, however, don't like the furniture and the appliances may be new but they're not stainless steel, their personal preference. They don't value these extras as much as the seller does.
Myth 4: Selling "as is" means a buyer won't try to lower the price after inspections
The notion that labeling a property "as is" protects the asking price is a common misconception. Buyers will conduct due diligence regardless, and negotiations can still happen. Sellers should be prepared for potential post-inspection requests for credits and repairs.
Myth 5: Let's split "the difference"
Real estate negotiations are seldom fair, and the idea of splitting the difference doesn't always lead to an agreement. Understanding the subjective nature of property value is crucial.
Let's say that in a negotiation, the seller comes down $15,000, expecting the buyer to reciprocate by coming up $7,500. However, the buyer is firm and only increases their offer by $3,000. The seller faces a dilemma, realizing that the perceived value of the property differs between them and the buyer, making it challenging to find a middle ground.
All of these myths are so common that every real estate agent has at least a handful of real life transactions that have gone sideways due to these beliefs. Don't make the mistake of falling prey to any of them!