Home Pricing Mistakes
It is a well-known fact that home pricing strategy makes or breaks your chances of cracking a deal when it comes to real estate. But pricing is not always as simple as it sounds. Things get complicated when you start attaching a price tag to you real estate; it is not just about numbers actually. Wrong home pricing can result in frustration on part of the seller and you. As an agent it is your duty to make sure your clients have placed the right price on their property.
Common errors and their solution:
We have listed a few common mistakes made while home pricing and easy solutions to fix them:
Not rounding off:
This is a mistake that happens when you are selling your property through an online agency. Most people use the number 9 and fix the real estate’s price at an un-rounded off figure, for example, $499,999. This is a grave mistake because websites have built in search engines which normally don’t come with and option consisting of a 9 figure, they show a rather rounded off figure i.e. $500,000.
Solution: Advice your clients to not fall for the trap of making the price look low by adding 9 to the figures. Tell them about how the online search engines work and help them close deals quickly.
Comparing with neighbors:
Comparisons in real estate can be fruitful if done in a certain way. The most common home pricing mistake is to look at the nearest house sold and compare your value to it. Many home owners suffer the “ugly baby syndrome”, which makes them to believe that their house is the best. As a real estate agent it is your duty to help them make realistic comparisons. Each house is built in a unique way. May be, the house down the lane sold at a high price because of its design or the features it had. Because of this reason you should avoid sizing up your neighbors.
Solution: make sure you help your clients with rational decisions and comparisons before labeling a price tag to their house. You must do proper market analysis and proper comparisons (compare apples to apples).
Higher home pricing:
This is a very common mistake that needs to be taken care of. Everyone likes to gain an extra profit over whatever they are selling. At time people knowingly quote a higher price so that they can nail an extra profit. This can turn out to be a serious mistake because buyers know what they are looking at as they have a buyer’s agent helping them. They help their buyers to size up the worth of a house. Even if someone wants to buy the property they will eventually ask for a discount and your price will have to come down to the original one.
Solution: if you believe your client has put an overpriced tag at his house and it is not worth that much, you should immediately let them know of your concern. If they still won’t reduce the price, discuss and agree that after 10 showings without an offer they would decrease the price.
Not all improvements pay-off:
If you think you can gain more money by throwing new improvements to the table, you are mistaken. If your improvement is not adding some actual value to the house, the buyer will not pay for it. Miles-Crocker relates to such an occurrence, “I once worked with a seller who had custom windows that cost $2,000 each. I told him that to a buyer they were just windows, but he thought that they added dollar-for-dollar value to the home. Needless to say I didn’t get the listing because we couldn’t agree on the price, but the house never sold and he eventually rented out the property.”
Solution: if your clients claim that they have added improvements, recommend an appraisal and get things on paper. You can also look at the improvements by yourself and suggest them a better way of doing things.