Pricing is not a simple process, and Knoxville home sellers are likely to make mistakes that waste both time and money.
Don’t let this happen to you! Read below and avoid these common pricing errors to give yourself the best shot at a fast sale:
ERROR #1: Not doing your research
Often times sellers will base the price of their home on the listing price of the house down the street or something they have heard regarding pricing in the neighborhood. While knowing the prices of your competition is important, in many markets, listing prices are not a good indicator of what your home will actually sell for.
“Currently in Knoxville you will find that homes typically sell for 7% to 9% less than they’re listed for,” says Leslie Sellers, president elect of the Appraisal Institute. “So sellers who list their homes based on other listing prices are already almost 10 percent too high about what they expect to get out of their house.”
TO DO: Price your home based on a “comparative market analysis”. This is a report prepared by a Knoxville real estate professional that looks at the recent sales of similar homes in your area. For a fee, you can also get an estimate of your home’s value with a professional home appraisal.
ERROR #2: Hiring the Knoxville real estate agent who tells you highest list price for your home
It never fails. You talk with several Knoxville listing agents about how much they think they can get for your home, and one gives you a significantly higher listing price than the others. WARNING: the agent may be trying to “buy” your listing by suggesting an unrealistically high asking price. This practice is unethical and will cost you time and money. You will ultimately end up having to reduce your price significantly after your home has sat, without interest for many months.
TO DO: Always interview at least three agents and choose one who backs their suggested listing price with comparable sales data.
ERROR #3: Getting Emotional
You have probably spend significant time, money, and energy turning your house into your home, so it is only natural to be invested emotionally in it’s sale. Here is the bad news, buyers won’t have the same feelings for your home as you do. So regardless of what you “think” your home is worth, this should not be a factor in determining your listing price.
TO DO: You must stay objective during the pricing process by focusing on data spelled out in the Comparative Market Analysis. Do not take personal offense to low offers. Think of them as the starting point of a negotiation that could ultimately result in the sale of your home and transition into your new home.
ERROR #4: Pricing High Early
You only have one chance at a first impression when selling your home in Knoxville and those first impressions are crucial to a fast sale. Research shows that the first 10 days of a listing generate the most activity. If your home enters the market overpriced, it will often be overlooked by many buyers because it will not fall into their price range. Then when you ultimately reduce the price to fair market value, those potential buyers will have already made an offer on another home. The buyers who may be interested in your new lower price will also see that your home has been sitting on the market for a while, which could lead them to perceive that there is something wrong with the home.
TO DO: Price your home correctly the outset to get the attention of serious buyers and sell faster. Keep in mind the additional costs of ownership that you will be paying if your home sits on the market for multiple months at an unrealistic asking price.
ERROR #5: We have “time to sell” so we can price it higher and see what happens
Sellers who are not pressed to sell often choose to test the market by listing their homes at a higher price and waiting to see where the market goes. Unfortunately in most markets, where home prices are dropping, waiting may actually cause you to lose money.
“It’s key to price properly right away because you have a greater chance of selling if you’re just on the market,” says Wendy Sarasohn, senior vice president of The Corcoran Group in New York ” Everybody wants something that’s brand new, not been shopped around, and not on sale.”
TO DO: Price your Knoxville home based on current home values and you will ultimately sell if faster and for more money.
ERROR #6: Market Chasing
If you overprice your home early, you could find yourself making incremental price drops but never quite catching up with the market.
Here is an example: Sellers insisted on putting their Knoxville home on the market for $250,000, despite the fact that comparable homes in the neighborhood were selling for around $225,000. Four months and no showings later, the sellers finally decided to drop the price to $225,000. However, by this time home values had declined significantly in those months, so the reduced price was still four months behind the market. Since then, the sellers have been reducing the price on the home about every three months, but never catching up with their competition.
In a potential buyer’s eyes multiple price reductions not only make a home appear stale, but that there may also be something wrong with it.
TO DO: Price your home competitively to begin with. If you don’t get any activity, don’t hesitate to lower your price quickly. Work with your Knoxville real estate agent to reevaluate market conditions and determine the fair market value of your home.
Don’t hesitate to contact me if you are thinking about selling and would like me to put together a Comparative Market Analysis on your home. I look forward to helping you price it right and get it sold FAST!