You understand that pricing your home is a process rather than a one-time event. Positioning your home to attract the most interest is the key.
The biggest challenge of positioning your property correctly on the market today is pricing. No matter how much sales history there is in your neighborhood for homes just like yours, there is still a certain amount of art needed to supplement the science. Every situation is different and market conditions vary with the seasons.
Zillow ‘Zestimates’ And Your List Price
The biggest change in the pricing process today is the influence of Zillow’s ‘Zestimates’ on the housing market. Every home on Zillow has a Zestimate. The Zestimate is based on public records and user-submitted information. It is generally a close approximation of value, but it is not fool-proof. Many buyers, however, will perceive it as the true value of your home.
Some sellers believe the best strategy is to price their home for more than it is worth because a buyer is going to try and talk you down. I suppose there was a time when this argument had merit but not today. If your home is priced well above the Zestimate, without clearly detailed justification as to why, buyers will not bother to look at your property – much less make an offer.
Zestimates Can’t Tell The Whole Story
Don’t give in the tyranny of Zillow either. Some sellers are ready to give in because they believe that whatever Zillow says their home is worth, is all they will get. They believe the internet destroyed any advantage a seller had in the market. Again, pricing a home is as much an art as science and there may be very real justification for an asking price, and final selling price, above the Zestimate.
Being aware of the ‘Zestimate Dynamic’ is no reason to throw in the towel. It may be that you and your Realtor® need to tell a more compelling story about the inherent value of the property and what makes it unique. Sometimes, it is appropriate to call out the unfair Zestimate in the public remarks section of the listing.
Zestimates Can Cut Both Ways
Believe it or not, sometimes the Zestimate on a property is too high. This is because Zillow’s algorithms do not take in to account the condition of the property. I have seen listing remarks with comments like “Priced below Zestimate”. Zestimates can cut both ways. That, of course, is of little consequence when your goal is to get the maximum amount of money possible on your sale.
You Want Your Money Back
You may be inclined to price your home at a price that ensures you recoup every dollar you have invested in it over the years. This is a common goal and I understand it perfectly. You have upgraded your house over the years and you want your money back.
There are a couple of arguments against this, however. The first is that expensive ‘upgrades’ like a new roof or furnace are really ongoing maintenance expenses. If you want to sell your house you need a water-tight roof and a working furnace. And, you needed those things to continue living in your home comfortably.
Other upgrades like room additions or swimming pools may never recover their actual cost of construction. We add things like these to our properties to maximize our enjoyment while we are there. There is no guarantee a new buyer will value your upgrades as highly as you did.
Your Value Is Restricted Or Enhanced By The Other Houses In The Neighborhood
At the end of the day, what similar houses have sold for in the neighborhood over the last six to twelve months is the best indicator of a probable selling price. Your upgrades may get you a sale at the upper end of the comparable sales range, but they will not get you a value much beyond that. Overall price appreciation over time moves the entire sales range higher.
This Is What Your Realtor® Needs You To Understand
Pricing your home is a process rather than a one-time event. Positioning your home to attract the most interest is key. While you want to ensure that you get the most money possible for your home, you do not want to price your home at a number that discourages showings and ultimately offers. Ideally, you want to price your house as competitively as you can and encourage multiple competing offers.
Don’t Wait More Than A Few Days To Adjust Your Asking Price
A house that does not sell within a time frame equal to the average days on market for comparable properties in the neighborhood will eventually sell, but for less money than it would have if it was priced right, to begin with. While it may make sense to price a property somewhat ‘aggressively’ out of the gate, leaving the property at that price for more than a couple of weeks without an offer can hurt your return rather than help. Your primary goal should be to attract as much interest as possible as quickly as possible.
Care To Learn About Listing Your Home With ROOST Real Estate Co?
- Try the new ROOST Home Selling Genius Mindset Scorecard. Score yourself on the eight mindsets that can make the difference between home selling success or disappointment. www.HomeSellingScorecard.com.
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