Top 3 Pricing Mistakes to Avoid When Listing Your Home For Sale
Updated: Oct 14, 2022
By: Kelly Gibbs
Pricing your home can be a tricky sometimes, it is more of an art than an exact science, especially here in Cincinnati. There is a lot to consider such as the updates you've done, the neighborhood you live in, the size of your home and the location. What the value of your house looks like on paper might not always match the market value of your home. Ultimately the market is going to determine how much your home is worth. If you're thinking of selling your home in the near future, you should be aware of the common pricing mistakes you'll want to avoid if you want to sell your home successfully.
1. Pricing it too high from the start: Don't make the common mistake of starting the listing process with the mentality of "we can always lower the price later." Statistics show that homes priced correctly when they first hit the market sell closer to the asking price than homes that start out too high. It's also common for sellers to want to price their home slightly higher than what they want to get as a final sales price. The problem with this thinking is that the higher you start, the smaller the pool of interested buyers is going to be. Buyers willing to pay what you really want for your house might not even see it because it's just over their budget at the price you have it listed for, when in reality, they can absolutely afford the price you really want to get. Your home also might appear as "over-priced" when you first list it for sale. Would you rather have potential buyers think: "That home isn't worth that much, they're crazy!" and try to negotiate your price down or "Wow! I love this house, I have to get it before it's gone!" and potentially pay more than what you are even asking?
2. Not basing your price on recently sold homes nearby: The best way to determine the value of your home is by looking at what the market is like in your surrounding area. Do NOT rely on valuation websites such as Zillow, the Zestimate is rarely accurate when pricing a home here in Cincinnati. Their algorithm combines information taken from public sites and bases values on what has sold within a certain distance from the subject property. Keep in mind it can take several weeks to a few months for some of these sites to update, making the information less timely. For instance a 3 bed/2 bath house in Hyde Park will certainly have a different value than a 3 bed/2 bath house in Madisonville, just like a house in Mariemont would not be a comparable for a house in Fairfax, but based on distance in the algorithm it gets grouped together and throws off the true estimated value. Make sure you're looking at similar homes that have already sold and taking their sale price into consideration. Other factors you'll want to consider are how many days those homes were on the market, what their original list price was, as well as the location and condition they were in. You can adjust your price accordingly to prevent listing too high and missing out on potential buyers. When it comes to determining the list price of your home, skip the creativity. For example if you're planning on listing your home around $300,000, you'll want to avoid listing it at $299,900 or $303,000. You will actually reach the most buyers when you list it at a round number because you will be reaching buyers at both ends. With the example price of $300,000, you will reach buyers looking up to that price as well as buyers whose search starts at that price. With buyers having home searches online that fit their specific criteria, you could easily end up decreasing your demand by listing at an odd price.
3. Refusing to negotiate: There should be some flexibility in your final sale price when you list your home for sale. If you are set on a specific number and won't budge when your listing isn't getting any action, it's not likely that your home is going to sell for the price you want. After all, the market ultimately determines the value of your home, not what you think your home should be worth. Talk with your Real Estate Agent about the current market and stay up to date on what is happening in your area. Consider setting up a pricing plan before listing your home for sale so that you have a strategy in place to adjust the price if needed. The longer your house sits on the market, the less desirable it's going to look to the buyers who are out there.
If you're thinking of putting your home up for sale and want to know the realistic market value, I'd be happy to put together a market analysis and chat with you in more detail. It's my goal to educate you and set you up for success so that you don't make any of these common pricing mistakes. When it comes time to decide on your initial list price, remember not to price it too high from the start, make sure you're looking at recently sold homes nearby, and understand that you will may have to negotiate. By following these guidelines, you will position your home to attract the most buyers when you put the For Sale sign in the front yard and be that much closer to getting it SOLD!