There’s a laundry list of “To Do’s” when you decide to sell your home. You’ve got to make sure all of those “honey do’s” you’ve been putting on the back burner for the last however many years are taken care of. Those stains in the carpet that weren’t a big deal must now be pleaded with to come out and that stair rail that’s just a bit loose has to be tightened.
It’s always the little things that get you! However, it can be the big things too. You’ve got to determine who will help you sell your home and then you’ve got to make an honest assumption of what your house is worth and what you’re going to list it for when it hits the market.
Deciding how to price your home is the single most important decision you will make when it comes to actually selling your home.
That said, let’s take a moment and look at the mistakes many sellers make when they price their home. Our hope is, of course, that you won’t make one of these errors. The consequence? It’s simple. Your house will be one of those that sits on the market like yesterday’s newspaper sits on the coffee table. The longer it sits there, the fewer people are going to pick it up and the lower and lower on the pile it will get…
Seller Pricing Mistake #1: The Zestimate is Always Right
Have you been on Zillow? Dumb question. Here’s a better one: How many hours per day do you spend on Zillow? Ok, so chances are if you’re about to sell your home you’ve checked out your Zestimate. Is it higher than you thought? Then you might be tempted to list your house at the Zestimate price. Is it lower than you anticipated? Well who cares about Zillow and it’s silly numbers anyway! You get the idea.
The Zestimate is actually something that’s been around for a very long time. It’s called an AVM or an Automated Valuation Model. It’s a computer algorithm that runs some quick numbers and comes up with a value for your home.
Now, we’re not saying that it’s not in the ballpark. It is. The problem is that the real value of your home is one of those tiny blades of grass inside the ballpark and it’s up to you to figure out which one.
Zilow’s Zestimate’s median error in the Bay area is 8.7% and it only has 2 stars for accuracy. But no one looks at this little chart when they are on Zillow!
So, think of the AVM or the Zestimate as your starting point. In some cases it might be close… in others it could be way off. Either way, if you use it as a point of reference instead of the “end all be all” you likely won’t regret it.
Seller Pricing Mistake #2: Million Dollar Upgrades
We know you spent a ton of money upgrading your home but please don’t expect to get every dollar and then some back out of it. Let’s be honest, did you upgrade your bathroom? New sinks, toilets, vanities and maybe even a bathtub? That’s fantastic and it could definitely help sell your home. However, it doesn’t necessarily mean a buyer will pay dollar for dollar what you’ve got in it. It just doesn’t work that way. You’ve enjoyed it for some period of time and now those “brand new” items are “used”.
Seller Pricing Mistake #3: Setting a Price Based on Homes Currently For Sale
Here’s the deal. If what’s on the market right now was true market value than the property would have a “contract pending” sign and a deal would be underway. If it’s still on the market there is likely an issue and it’s probably the price. Don’t fall into the trap of pricing your home based on what others are trying to get for theirs.
Like the Zestimate, this is a good point of reference but it doesn’t replace a good old fashioned comp assessment. You’ve got to look at what has SOLD if you want to find a true comparable. Take into account when the property sold and what similarities and differences it has to yours and then you’ve got a better idea of what true market value is for your property.
Seller Pricing Mistake #4: Leaving Negotiating Room in the List Price
If you think buyers will make an offer well below your list price so you list your home above it’s actual value to compensate… your going to be disappointed.
Refer to #1… We all have access to Zillow and we’re all obsessed with it. Give your buyer some credit. Chances are if you’ve priced yourself to leave negotiating room the only thing you’ve done is price yourself out of the market. Buyers likely won’t even give your home a look because it won’t come up in their search or they won’t want to see a home that’s clearly “overpriced.”
Seller Pricing Mistake #5: Beware of the “Dream Realtor”
He’s dreamy and he descends on your home like a palace in the middle of a dessert. He looks at everything you’ve done and you swear you can see dollar signs ringing up in his lovely eyes. He gives you a list price for your home that is beyond your wildest dreams and he promises you that he’s the guy to get it.
Chase him out… slam the door…. and never let him back in!
If you think someone is telling you something that’s too good to be true…they probably are.
Use your brain and the resources available to you. Interview several Realtors and then make your decision. If you let McDreamy sell your home you’ll likely be waiting months to get an offer and you might have to fire him before you get your sold sign. Be level headed and realistic.