One of the fundamentals in real estate is the importance of pricing a home. The housing market is always changing so it is crucial to list your home at the right price. Naturally, we’ll assume that the seller and the agent are doing everything else right… the home has been properly staged for presentation, photography is exceptional, online marketing is robust, etc… If you get all of those important items right, but miss the price point, the home will sit and rack up the dreaded “Days on Market”. Presently, the subtly changing market is causing some restless nights for sellers and their agents.
Pricing Mistakes We Often See with Homes for Sale
- Pricing to the unsold homes, rather than those that have sold. Sellers often make the mistake of looking at the homes on the market and pricing “comparatively” to the ones that are unsold, rather than viewing them as the homes that they must beat to attract buyers.
- Pricing based upon historical sales without considering a changing market. This is the mistake that we’re seeing with the highest frequency among Long Island homes. In all fairness, the current shift in the market has come rather abruptly, following the hit to the tech sector early this year. The biggest pricing issues are in the $2M+ sector where there is an abundance of unsold inventory.
- Sellers over-valuing improvements. Just because a seller spent $50,000 putting in rare porcelain tile from the far reaches of China in their powder room doesn’t mean that a buyer is going to pay more for the house. In fact, that “improvement” might be more of a liability than a value enhancer. The point is that not all “improvements” provide a return on investment.
- Sellers thinking that they’ll get full value for maintenance expenses. This is another situation we see with a fair amount of frequency…”I just put a $35,000 roof on my home and spent $20,000 replacing the sewer line, so I need to get at least $50,000 more for my house.” Yes, it sometimes happens. In general, maintenance items yield little or no return on your investment. It’s simply expected that the roof does not leak and that the sewer line works.
- Pricing based upon need. “But, I need at least $___ in net equity to buy my next house.” That may or may not be true, but it has nothing to do with the market’s perception of your home’s value.
- Setting the price based upon the Zillow “Zestimate”. I could go into a full rant on this subject. Suffice it to say, Zillow’s beloved “Zestimate” does NOT work with Long Island homes for sale, nor does it work if you are simply trying to determine your net worth and want an estimate of our home’s value. Automated valuation models don’t work here.
- Failing to listen to the market and adjust the price when activity drops off. The old adage applies, “If you keep doing what your doing, you’ll keep getting what your getting.” Naturally, exceptions occur, but generally its important to pay attention to the market. If your home is not selling and others around it are, pricing is usually the problem.
So call us, we will help you Price it Right!!!