The risks of over pricing your home when listing it for sale.

It is something we realtors know. Either because our mentors drilled it into our minds or we have learned it by experience. What ultimately decides the sale of a home is the price. That is why pricing is sometimes the only word you hear coming out of some real estate agents.

I know, for you as a homeowner, it is something that you feel should not come into play. You are paying at least your 6% to the agent!! They should be able to work for it and earn the commission. In theory I will agree with you. How ever, things in theory do not always work in reality. There are some things that you should keep in mind when trying to decide the price point to start.

Let us work it backwards. The real estate market is very local in nature. Sometimes is as local as your own community, your street or even the side of the street! What that means is that your particular home has particulars that make it stand above, similar or below others. Obviously for you is the best home, period. And with all due respect, only someone that has been around selling homes for a while can tell you if that is the case. Look for a realtor that knows the area. Ask if they have done any homes in the community (or the street). Then listen. Let me try to explain it this way. You know your body very well. For you is the best (is the only one you have). And let me ask you question. Even though you know your body very well, would you try to heal yourself or have an operation or any other kind of medical procedure on yourself? Of course not. You go to a doctor!! Heck you might even look for a specialist and then you will do exactly what they say. Your life might be on the line. Same thing happens with the sale of a home.

In today's market, for most of the nation, the same message is being sent to sellers. Houses that are selling are the ones that are priced correctly. A correct price is one that is at the last sold or is adjusted to justify the price. Adjusted is an appraisal term. It means moving the price either up or down depending on things like square footage, features, even things like distress or motivation of the sellers. How does that apply to you. Well for your home to be priced correctly, you have to look at the last few sold homes that are true comparables. This is where most home owners cannot be objective. I have done it my self. We become subjective. We say things like..."my home has 24k gold faucets" " so it is worth more" ... well it has more expensive faucets for sure. But Champaign doesn't come out bubbling from them, is just plain old water just like the house across the street.

Lots of homeowners think that since the house went up for this price, they should put theirs up for the same or more. Please do not hurt yourself by doing this.

Here what happens most of the time. Let us say their house got on the market for $300,000.00. The correct listing price should have been 250,000.00. Realtors will let buyers they are representing know right of the bat that the house is 50k overprice. If the buyers are not in the mood for negotiation (in today market most people are not), they will just go and look the ones that are correctly priced. So that house will be lowered little by little. First 275k then 260k eventually it would be at the right price of 250k. By now something most probably has happened. In the passing of time other homeowners have put their homes up for sale at the right price. Something worse could happen too. The house across the street was lowered even more! So your home has become flagged. Is one of the phenomena that home owners cannot seem to understand. It is a true thing that happens. The longer the house sits on the market the harder it becomes to sell it. My opinion is that people like to buy things when they are just out. We buy the excitement more than anything. A house that has been on the market for a while, at what ever price is NOT exciting to even look at.

So now, time later, your house has to be lowered in order to be moved. It might be lowered to 240k but most times it can go as low as 225k or 200k. Even at that price, be prepared to give all kinds of goodies or pay something for the buyers.

Can you imagine if you decide to put yours up for 25k or 50k more than that subject house just because you have "24k faucets"? it will be disastrous.

That is really danger in NOT pricing the home right the first time around. My professional advice is to price it the same as the last sold or 5% below it. Period! Forget about the 24k faucets. You love them. Even if the buyer loves them too, they are not going to tell you. They might even tell you that they hate them!

As far as the agent earning the commission, remember that we still talking about a sale. A sale involves 2 parties or more. One of them is the buyer. You have bought things before. When was the last time you gladly over paid for something? When was the last time you bought a big ticket item without doing much research and meditation? Heck sometimes we even call friends and ask around. Buyers usually hire an agent just so that they can have good advice on the purchase they are about to make. That agent will tell them all the information we discussed. It is public record and they have the duty to tell them. Their license might be on the line!

With the internet, even if they don't call an agent, they go online to websites like mine
http://www.IsellOrlandoHouses.com and do all the research they need to come up with a sensible price.

So here you have a buyer that knows what houses are selling for.

I am a professional salesperson. Have being doing if for years. Have taught and trained plenty of others. I would have to tell you that one CANNOT really sell something to someone unless the other wants to buy. Most of us do NOT want to buy something that is overpriced, PERIOD! As a salesperson, knowing that I have a true buyer, I will put him/her in front of a house that is priced right and then go on to sale them that house. I will do that for only one reason. As a salesperson I get paid when I sale. Does not really matter which home I sell. It sounds cold. I know. I would be doing you a disfavor if told you otherwise. Hence the importance of that price point at the very beginning being the right one.

What do I recommend to you if you are thinking about selling your home? Many things need to be looked at. When it comes to the price point think long and hard about why you might be asking the price that you have in mind. If you cannot come up with hard comparables and back up your price with hard facts then you might be setting your self up to ultimately selling the home for a lot less than what is worth.

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