Spring of March 2017
I was driving to the store this past Saturday morning, and it was apparent to me that the spring market (although the weather might fool you) is in full swing.
On nearly every street corner I saw signs from agents promoting their various open houses. I thought I would give my good buddy Eric Macy a call at St. Louis Finest Homes, just to see if he had an open house that weekend.
In chatting with him, the topic of pricing a house correctly got brought up.
You see, most people when selling a house want to price their house $5,000 to $10,000 (sometimes more) above asking, in hopes that they might get lucky and find a desperate buyer.
There is a fundamental problem with this strategy…
And I believe it is one of the biggest mistakes people make when selling their house.
The first 2 weeks that the house is on the market is the most crucial time of the selling process.
When your house is newly listed, it sits at the top of the real estate feeds online. The most notable being Zillow.
Almost all buyers that are looking to buy start their search online, and most go to Zillow at some point. Having your house priced right, can help you get offers in a matter of week, if not days.
Price your house too high, and it can sit for weeks, if not months.
What happens when your house sits?
You are forced to drop the price.
Dropping the price of you house is like blood in the water.
Buyers can smell it from 50 miles away, and will almost always give you an even lower offer than if you priced it right from the beginning.
What do I mean by that?
Let’s say your houses is worth $150,000 based on houses that have recently sold in your area. You decide you’re going to list your house at $175,000 because inventory is low, and you just might get lucky.
Your house sits. Not even a bite for over 3 weeks. Why would there be, the houses is over priced!
You get a call from your realtor, who suggests you lower the price. “Let’s try $165,000” they say.
2 weeks go by, a few phone calls, maybe even a couple showings, but no offers. The house sits. It’s still priced too high.
You should also understand…
Almost anyone buying a house is going to be represented by a real estate agent as well, whose primary job is to represent the best interest of their client.
And what do you think the biggest “interest” most buyers have?
NOT paying too much for their house, of course.
So when you go to price your house over the fair market value, chances are you’re going to wind up on the losing end.
Let’s fast forward another 2 weeks…
Your agent calls, time for another price drop. This time, $155,000.
The phone starts to ring, and you’re getting some offers. The only problem is, after 2 price drops totaling $20,000, the sharks come out. They smell the blood, and they attack.
2 offers are submitted. 1 for $145,000 and one for $140,000.
You finally have offers, and they are below what you should have listed the property for in the first place.
“This happens all the time!” Eric told me.
“The biggest mistake sellers make”, he added, “is asking too much for your house right out of the gates.”
When you go to sell your house, and you choose an agent, those agents have your best interest in mind. After all, they don’t get paid unless the house gets sold.
On top of that, the higher the sales price, the more they get paid!
Don’t you think they would want to list it for as much as they possibly could?
In the hypothetical situation described above, the agent would have been more than happy to list that property at $175,000 if he/she believed that it would sell at that price.
So why do sellers list too high?
Don’t let emotional ties to the property, Zestimates (Zillow Estimates), or the house across the street that just sold, cloud your judgement.
After all, if you are using a realtor, they are the expert, and absolutely have your best interest in mind.
If you are looking to sell your house, and are not yet working with an agent, please give me a call at 314-768-3703, or shoot me an email at email@example.com
We work with a number of great realtors in all parts of the St.Louis Metropolitan area, and would love to make an introduction.
If this article was in any way helpful to you, please think of just one other person who may benefit from reading this, and share it with them right now. It would be a great help to both of us! Thank You!