Biggest Mistake Sellers Make, and You Can Never Fix It.
What is one of the worst and irreparable mistakes one can make when selling one's home?
Overpricing it.
A lot of time in a bid for business, REALTORS® may take on a listing by suggesting a higher price or even just agreeing to the client asking for an above-market list price. The thing is, the seller's often find value in every feature of their home. Not every buyer may line up with that perception and want to pay for every element. Let me give you an example.
Perhaps the sellers had an RV parking pad installed with hookups on the side of the house. They may have paid 35K to have that done, but that does not mean the next buyer will find the same dollar value on that. Often, when renovations are done, they can be done so that the final product is excellent. But not something a future buyer would pay that amount of money; there is such a thing as spending too much money. So what happens when you're priced too high?
Relevant buyers don't see your property at all in their searches.
They have their four-bedroom, four-bathroom search set to top out at 1.5 Million for a particular area. If you are listed at 1.55 Million, they won't even see your property. If they don't see, they don't set up showings; if they don't show as an agent, it's crickets; I don't even get to provide you with feedback. We get no information.
Days on the market start to creep up.
Depending on the general mood of the market, this can either be a really bad thing or a terrible thing. The longer a home sits on the market, the more buyers imagine some major issue. Once this stigma starts to build, it is impossible to erase as sales history is always permanently part of the property information.
The seller comes across as unreasonable or not serious about selling.
The majority of sales happen from serious buyers working with professional Realtors. They have generally sold their home already and are now shopping. These buyers are qualified and reasonable, and ready to go. They generally will look at an overpriced listing and not bother getting tangled up in a situation with an unreasonable seller.
Get Ready for lowball offers.
If the valuation of your home has no grounding in comparable sales, get ready for lowball offers. It's weird but true, you will attract these types of offers, and they can be frustrating and waste valuable time if you try engaging them.
Remember, many buyers need bank approval for financing.
Even if you have yourself convinced your home is worth way more than market value, and a buyer is willing to pay it. The banks are often still a factor; buyers will be on the hook for a shortfall if the appraisal comes lower than the purchase price. Many buyers couldn't overpay if they wanted to. If they had a subject to finance, they would have to fold the deal and move on.
Price reduction.
Every time you make a price reduction, you show a price below the posted price you would accept. You don't want to fiddle around with this too much; if you are in a position to do a correction, try and do it once and make an impact. This isn't like selling something on Craigslist or Marketplace; this is "the big time" and needs to be done correctly. Price reductions often show buyers you have already moved off your price and it makes them feel like there could be more movement. If you have made a mistake with your pricing, your best move is to correct it. Just try and not make that mistake because there are consequences.
Every seller looking to place an offer on your home looks at the same things—the Comparables for the last six weeks. Look at what has sold similar to yours. They look at how long you have been on the market and likely view the other listing available in your category.
If you are lucky enough to have them find your listing and view it, they will most likely not see the value and offer on another property. If the buyer does see some value, they will offer based on comparable sales. Sellers do not ultimately decide the value of a home; instead, it is always the buyer.
In closing, as a listing agent, I need to be able to sell your home. I need to back up the valuation by showing buyers comparables, pointing out universally appreciated upgrades and features with logical dollar values.
There are certainly exceptions to what I am staying, and some features are more subjective than others. But all in all, it's essential to ground the asking price in comparable sales and provide a logical argument to a would-be buyer as to why the home is worth what you are asking.
Best,
Justin Syens