As a follow on to yesterday’s post on overpriced listings, I came across this very well written Forbes article, which, if you’re selling your home, you should definitely soak it up (and yes, I did “borrow” their picture for yesterday’s post as well.)
Here are the five tell-tale signs:
- Your home is priced well above neighboring properties. The first thing brokers do before they recommend a price to a seller, is they look at the sales prices of the last three sales of comparable-sized homes in your neighborhood. You can conduct your own research to determine a reasonable price before you hear estimates from brokers. Do a quick search online to see what neighborhood homes are selling for, and there are some tools that can help determine a roundabout value of your home based on your zip code and other factors.
- After a couple months, you still haven’t received an offer. Don’t panic just yet. This isn’t true for all homes, (it’s not uncommon for high-end homes, for example to stay on the market for years) but there should be a flurry of showings and interest in the first 4 to 6 weeks the home is on the market if it’s priced properly. Although one assumes that overeager buyers are indicative that the price is low, realtors say competitive bids are more likely indicative of a reasonably priced home.
- You spoke to several realtors before you hired the one who recommended the highest price for your home. Realtors seldom want to take a property that is overpriced, simply for the fact that the chances of selling it are slim, and that means their chances of making a commission are greatly reduced. Common sense is that you should speak with several realtors before choosing one to represent you, but if you consistently hear a ballpark price that seems low to you, the price may be right. Realtors are (or should be) intimately familiar with most real estate activities in their market, and they should have the best idea of how a home should be priced.
- There aren’t any scheduled showings. Immediately after the home hits the market, there should be at least a few appointments for showings. If there aren’t, it might indicated that local brokers think the home is overpriced and therefore aren’t showing it to their clients. Realtors suggest that after a month, if there is very limited interest in the home, it’s not too late to reduce the price, but it’s important to act quick in order to sustain some interest.
- The home is priced for expensive, unique amenities that may not hold broad appeal. Your family may have enjoyed endless hours of fun in your indoor badminton court, but not everyone loves badminton as much as your family does. The more customized the home’s amenities, the less likely the buyeris to see their value in the sales price.