Pricing Traps For Unwary Home Sellers

By Noel Peebles

What does your home value at? What would a prospective
buyer be willing to pay for it?

When selling a home FSBO (for sale by owner), sellers
often badly miscalculate the true homevalue in today's
market. They have no idea what their home should value at,
so simply think up some ridiculous figure in the hope that
someone will rush in and pay their grossly inflated asking
price.

Truth is; if you price your home too high it may take a
long time to sell. The house might start to look "shop-worn",
as it sits on the market month-after-month waiting for a buyer
that may never arrive. If this happens you'll no doubt get
discouraged as you continue to pay your mortgage, taxes,
insurances etc. When you do finally reduce the price, you
may have to sell it for less than you would have, if you
had set the right price in the first place.

The point is; most buyers will want to know how long your
home has been on the market. If it has been for sale for
some considerable time, then the buyer may think something
is wrong with it, or that you are desperate to sell ---
which you might be.

On the other side of the coin; if you price your home too
low, you'll get thousands of dollars less than you would
have if you had done your homework by knowing the true
market value.

So, when selling your home FSBO, it pays to do some research
rather than simply guessing the value. Look around to see
what similar homes in your area have SOLD for, ask some
agents to value your home, or consider contracting an
appraiser to give you a more accurate market value.

Here are 4 pricing traps to watch out for:

Pricing Trap 1.

This can be a BIG trap!

Many homeowners price their home based on what some other
homeowner is asking down the street. Your neighbor can ask
a million dollars, but it doesn't mean to say they'll get
it. The asking price is NOT the selling price. Base your
price on what the market will stand, not on some
ridiculously inflated price that some neighbor might
be asking. 

People tend to exaggerate when talking about the
fantastic "deal" they pulled off. It's an ego thing.
So, be wary if a neighbor tells you they sold for
________ dollars. Work on facts, not fiction.

Pricing Trap 2.

Forget about what you paid for your home - it has no
relevance to the current value or what it might
realistically sell for in today's market.

Pricing Trap 3.

Take care valuing your property based on your
Tax Assessment (sometimes called Rateable Value),
plus some magical percentage added on for good
measure. Depending on where you live, Tax Assessments
can be quite different from the true market value.

Pricing Trap 4.

What you "want" or might "need" in monetary terms from
the sale is irrelevant. This has no bearing on the
market value. A buyer will not be interested in your
personal circumstances. Your home is only worth what
someone is prepared to pay for it, which in most cases
will be the true market value.

At the end of the day, price will determine how quickly
your home sells.

If you need to sell your home in a hurry, then in most
situations, you will need to price it at or below the
market value.

If time is not so critical, then you can try to get
full market value or above.

A good marketing campaign can only do so much. Price
will determine how quickly your property sells.


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© Copyright Noel Peebles Market Leaders Ltd.

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Noel Peebles is co author of the best selling ebook
"Home Selling Secrets Revealed" Discover how to sell
your own home in the shortest time... for more money...
and avoid paying thousands in real estate commissions!
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