Lynn's Real Estate Report

THE OVER-PRICING PENALTY

It is standard procedure these days for homeowners who want to sell their home to price it somewhat above market value knowing that prospective buyers are going to make an offer below the asking price. So far, so good because that is exactly what most buyers will do. The problem occurs when a homeowner prices the home too high. Overpricing a home can result in having to settle for a lower price than it is worth. Here is why...

AGENTS CANNOT BE BOTHERED

When your home is listed in Multiple Listing Service through your real estate agent, you benefit by having hundreds of agents working to find the right buyer for you. However, agents that are working with qualified buyers will usually not show a home that is way overpriced. This means that your home will languish on the market while other homes in the area are selling. Homeowners start to get very nervous when their home fails to sell in a reasonable period of time especially if time constraints are involved. Situations like this often lead the homeowner to reduce the price below fair market value in order to ensure the sale. Here is how to avoid the urge to over price your home.

FOLLOW THREE PRICING GUIDELINES

First, the price you ask for your home must be competitive with the asking price of similar homes..

Second, you do want to leave negotiation room for buyers. While there is no hard and fast rule of thumb, adding two to five percent over fair market value should provide the room you need. It is important to have a good idea of what Fair Market Value is.

Third, Fair Market Value for your home depends on a variety of factors including recent sales of comparable homes, current market conditions and the condition of your home. Contact me by phone or by Email and I will provide you with a Free Market Evaluation of your home. I cannot stress the importance of taking this step
WHY IT IS EASY TO OVER PRICE

There can be a vast difference between the value that you place on your home and Fair Market Value. You may have the flooring, the window covers and the landscaping just the way you want them but others may not place such a high value on your decisions. Homeowners are also extremely influenced by Wishful Thinking. Because the home you want to buy is slightly higher than what you can comfortably afford, you inflate the value of your current home to offset. It is human nature to want to buy low and sell high. Sometimes homeowners are misinformed about what other properties in the area sold for. It is easy to determine the listing price of a home but sellers are not always that candid about the actual selling price.