There are potential dangers when it comes to pricing your home in any kind of real estate market. Sellers can be reluctant to price their home in line with the marketplace as they feel they may be giving away too much of their home equity. The reality is pricing your home right from the start will get the net result you are looking for as a seller. Here are some of the reasons why pricing your home at the current market value is so very important:
- Potential buyers typically will skip looking at your home as they think it is out of their price range.
- Buyers comparison shop when considering a home purchase. When a buyer compares an overpriced home versus one that is priced at market value it will likely convince them to place an offer on the well priced property instead of yours.
- Lenders today will order an appraisal prior to funding a mortgage as part of their lending criteria. Ultimately, it is futile to price a home for more than it's worth!
- Properties that have been on the market for long extended periods of time tend to gain a reputation of being "stigmatized" as buyers will question why it has been on the market for so long. Perception is a key factor in how a seller's home is viewed by the average home buyer.
- Real estate agents when first seeing an overpriced listing hit their "Hot Sheets" may skip over showing it as the price shows little motivation by the seller. Buyer's agents are always keen on getting their clients through the doors of a well priced home first in order to give their clients first crack at getting the home of their dreams.
- The longer a listing stagnates on the market the more likely it will sell for less than had it been priced right in the first place.
These are just some and by no means all the reasons why you should consider what the market is doing when it comes to pricing your home. Your local real estate professional is there to help you get your home sold for the most amount of money in the shortest period of time. After all, doesn't a quick sale mean less interruption to your life and allow you to start planning for where you want to move to next?
Jason Neumann is a sales representative with Century 21 Assurance Realty Ltd. in Kelowna, BC.