Since we are also homeowners too, we realize that almost every single seller wants the biggest bang for their buck when selling their home. But with that said, there are missteps or mistakes that a seller can make when attempting to establish a list price. Deciding how much to list your home for is, in our opinion, one of the most important decisions you have to make as a homeowner trying to sell your home.
Overpricing Your Home
We mentioned it above, 99% of homeowners want the most money in their pocketbook at the end of the day. However, reaching beyond the sky and setting a higher than average list price can and most likely will backfire. Why? Buyers have an endless supply of data today with listing and sold information being so readily available. Because of this available data, buyers come to the plate smarter than they were years ago and will be reluctant to make offers on a clearly overpriced home. Often times, these educated buyers will either fence sit waiting until the seller makes a price reduction and is eager to sell or they will make a realistic offer. The former is more common than the latter unfortunately so pricing right out of the gate is paramount. The last thing a seller wants is to create a stigma of a property with a problem because of overpricing a home.
Relying On Bad Data
We will pick on Zillow for a moment and only because it is a website that most people know and visit often. They do have a flashy site which is easy to use, what they do not have is accurate sold data. Why? Sold data is supplied either by the homeowner, real estate agent or the MLS. In Texas, we still technically operate under a non-disclosure state meaning we do not supply sold data to third party companies such as Zillow. In other states that do not fall into the non-disclosure bucket, Zillow’s data will likely be more accurate but in Texas a Zestimate will rarely accurate. Because of how Texas operates do not put a whole lot of stock in Zillow’s Zestimate as the best source of accurate data is from an appraiser or a realtor who both get their data from the same source – the MLS.
Comparing Your Home To The Wrong Properties
Your home may be worth more or less than a similar house in your same neighborhood. Why? There are additional features that are either added or stripped from each home, variances in square footage, views and sometimes even hinderances or an inferior or superior property condition will lead to value differences. For example: if your home has a half acre lot, it will not directly compare to a home sitting on a full acre lot. A community of homes built by the same builder with the same five or ten floor plans will all have variances to due size, condition and features. It is our job to scan sold data, mimicking the function of an appraiser finding homes both bigger and smaller, older and newer and in better and worse condition sold within a specific span of time and then make adjustments for each. Establishing a price using this manner allows us as real estate professions to ensure a future low appraisal does not cause turbulence down the line or better yet stop the transaction dead in its tracks.
Factoring In Your Emotions or Memories
What you paid for your home, how fond your memories of your family in the home and how cool you think your home is will not make a buyer pay more for you home. The sellers financial position or needs are not relevant to a buyer. All that matters to a buyer is what the home is worth in the open market today based on the most recent sales. and perhaps if your home is more desirable compared its competitors in the open market.