The Price is Right

“You never get a second chance to make a first impression”

You see the phrase used in marketing quite often. So it’s no surprise this holds true when setting the listing price for your home. Setting the right listing price from the first day you put your home on the market is critical to a successful sale in a reasonable amount of time.

Do you really know what your house would sell for? Does the agent really know? Does the agent know, but is unwilling to tell you the truth?

1. Buyers want more value, sellers want more money…So you know that there’s a lot of homes for sale right now. Unless your home is truly unique (private location, huge lot, lavish decor, etc) there are a dozen other comparable homes on the market. Setting your price correctly is a compromise between giving the buyers a sense of value without signing over all of your hard-earned equity. I can tell you from experience that when a buyer walks into an overpriced home, they immediate dismiss the thought of living there. It’s a major turnoff. The buyer is usually reluctant even if the seller is willing to be flexible with the sale price.
2. The Agent that tells you the highest price isn’t necessarily the best… Agent A strikes up a conversation with you and says your Staten Island, 2-Bedroom Townhouse can sell for 1 million dollars. They justify it by over-glorifying all of (and only all of) the positive selling points of your home. Agent B tells you that it’s really worth about $400K. Agent B justifies this price with recent comparable home sales. You pick Agent A because a million dollars sounds a lot better to your bank account. You list your house at the higher price (OK, this is an extreme example… but here’s the point). If any potential buyers come to your house when it’s way over-priced, consider their interest to be gone forever. These buyers are less likely to come back to your home again even if you lower the price 6 months later when the listing expires. Face it, the buyer will move on and look at something more reasonable…. it’s too late, you lost your sale!
3. Appraisals are heavily scrutinized and tend to come in lower than you think (or lower than they did a few years ago)… Banks are extremely critical about appraisal values. There’s a school of thought that feels that inflated appraisals artificially raised home prices and contributed to the mess we’re in today. I wouldn’t place the blame entirely on the shoulders of appraisers, but they theory holds weight. Either way you see it, that doesn’t really happen anymore. Appraisals (and mortgage approvals) have really made a housing market recovery difficult since they are a deal-breaker.
   For example, you list your house for $525K, and sell it for $500K. The buyer needs to put down %20 of the appraisal value. The appraisal comes in at $450K. Your agent knew this was about right but neglected to tell you. Now the buyer needs to put down $90K to have 20% equity PLUS an extra $50K to cover the agreed upon sale price. The buyer will walk away. Meanwhile, you spent two months planning your next move thinking your house was sold. You will not be happy, trust me.

 That’s just a few reason’s why you need to make sure you’re listing your house at the right price. Of coure there are exceptions to these points and everyone’s situation is unique. That’s why having a knowledgable and dynamic agent on your side will make the sale of your home worry-free and more profitable.