“I need to sell my house for $400,000.”
As realtors, we hear this from sellers ALL the time.
Pricing your home based on what you need to make is the absolute worst way to begin the process of trying to sell your property. A buyer is not going to pay you what you need. If this were the case, every seller would name their price and buyers would pay it.
But let’s play this out. . . . Let’s assume that you listened to the advice I gave in my column in
December, and you choose an excellent realtor to represent you. The realtor thoughtfully put together a report explaining how he or she arrived at the suggested price range, setting the top figure at $350,000. At this moment it is important to remember why you chose this person. You hired that realtor because she or he is a professional and knows the market. You really should listen.
But you don’t, and you insist on listing your home for $50,000 higher than the suggested price. Some realtors wouldn’t even take your listing, as your price is much higher than what they believe your home is worth. But your agent begrudgingly agrees, and puts your home on the market for your number.
Congratulations! You have succeeded in outpricing the people who would buy your home. As a matter of fact, those buyers don’t even know that your home exists because you are listed above their price cap.
The buyers who do see your home are those looking at properties priced at $400,000 or higher. Not only do you completely miss the right group of buyers, but you have managed to make the other homes listed at $400,000 look even better because yours is at the bottom of their price range and obviously overpriced.
Days go on, and your home sits on the market with very few showings. Days turn into weeks, and you finally agree to reduce it to $350,000, which was the top number that your agent gave you — more than a month ago.
Now, although the correct buyers are seeing your home, they wonder why it has been on the market for so long. What’s wrong with it? You are now perceived by these buyers as motivated because of the length of time your home has been on the market and you were forced to drop the price.
As a result, your home is now actually worth less than it would have been when you first listed it. You have succeeded in driving down the price because you needed to make a certain number. It will sell eventually, but at a much lower price than it would have when you started this process. Now it’s considered an old listing.
Marjorie Youngren is a broker at RE/MAX Leading Edge in Lynnfield. E-mail your questions to Address@globe.com.