If you’re thinking about listing your property with a higher or lower price to test the market, don’t be too quick to make this move, as it can prove to be a costly mistake. Pricing your property incorrectly can turn potential buyers off for a number of reasons.
Consider these key moves to help you better understand the pitfalls you should avoid to save time and avoid making a big money mistake.
1. Wasting the high-exposure time when a listing first hits the MLS
When your home first hits the MLS, it’s fresh on the list of available homes and more interesting to a lot of buyers. That’s why you want to strike while the iron is hot. A buyer who wants to be in your neighborhood may pay a higher amount, but you won’t know if you’ve priced your home too low. For great price comparisons in your area so you know the going rates, check out Realtor, Trulia, or Zillow.
2. You can lose buyers doing internet searches
While a lower price might draw a few potential calls, you can actually turn people away if you price too low. They will want to grab a great deal, but a potential buyer who has done their homework might think something is wrong with a property priced too low.
As the owner, you can also lose buyers doing internet searches because they may not see your listing. Keep in mind that a home should have a competitive price. Sales prices that are dramatically lower might not show up in search results in the same neighborhood.
3. Your listing will get old
If you’re waiting for a buyer, you may end up finding that your property is sitting for weeks or months. And, if you’ve already moved, you still have to cover the mortgage payment. That’s another reason why you want to ensure you’ve priced it accordingly and work with an agent who can help you sell–and advertise–your property the right way.
4. The house won’t appraise
Another problem you can run into is with the appraisal. Price it too high, and the appraisal may come back lower and kill the sale.
Price the property lower than its true value, and it can raise red flags when you get it appraised, as it may get valued at a higher amount. Again, consider the perspective of a potential buyer who may not understand why you’re handing money away.
5. Agents who overprice sound good, but usually have a plan for price reductions
After pricing a home too high, an agent may try to compensate by lowering the price over a period of weeks. On MLS listings, this can make you look desperate A home with several price reductions may result in a buyer who lowballs you because they now think you’re desperate.
Simply find the best rate for your home. This can be done through the inspection, an estimate, or by comparing other properties in the area. The time you take to price your home correctly may help you sell it faster.
Selling your home can be a time-consuming process, but pricing it right can help with offers. Focus on having a great marketing plan to give your home the visibility it needs, have a floor plan to give potential buyers when they see it, and up-sell the upgrades and improvements you’ve made. That way, you have an investment that future homeowners will see as their future home.