In this latest instalment of Gott Realty’s Top Tips for selling, we share the 6 pricing myths to stop believing when selling your home.
Here at Gott Realty, we want you to have the best chance of selling your home for a great price. You hear a lot of things when you’re preparing to put that for sale sign out the front of your property. Some might be helpful and others not so much.
6 Pricing Myths to Stop Believing
- You always make money on your home – Real estate does appreciate over time but selling your home for more than you paid for it is not a guarantee. We are currently experiencing sustained long periods of time where prices don’t appear to have moved up much. Over the last 10 years there has been minimal increase in house prices which has occurred across many local suburbs. Only a few suburbs with price increases include Bray Park, Lawnton and Bracken Ridge as shining examples. A major reason for these suburbs to have had growth has been the Gateway Arterial road upgrade and the new university at Petrie.
- Price your house to make a quick dollar – We all know what you’re thinking – “Hey, it’s worth a shot!” – if you start with some sky-high asking price and hopefully lure an overpaying buyer to the home. But you’ll soon come back to Earth when you realise that overpriced homes just don’t sell. What happens in real time is you are sacrificing the best marketing period – the first 14 days on the market when many homes sell to “heart” buyers. Exchanging the first 14 days for the remote possibility of finding a “wood duck” buyer who will overpay for your home is like expecting to win the lottery without a ticket on Saturday night. It just doesn’t happen in the information technology age.
- If I overprice my home, it’s no big deal to lower it later – Sorry, overpricing your home isn’t easily fixed by just lowering the price later down the track. The reason being that homes that have lingered on the market for months – or have undergone a number of price drops – make buyers assume that something must be wrong with the home. As such, buyers might still steer clear or offer substantially less than the current asking price. Make sure you do your research and obtain a number of Competitive Market Analysis’s (CMA’s) so that you know where your home sits in the current market place. Read more about CMAs here.
- Pricing your home low means you won’t make as much money – You will need nerves of steel, as well as the market needing to be very buoyant or in boom times to try this one out. The idea is to place a price on your home that is at the bottom of the selling range. When the property hits the market, you are inundated with buyers. Hopefully a bidding war takes place and your low price escalates to a very high price. Some agents use this method in disguise by offering a property at offer over $XYZ in the hope that they receive multiple offers for the property. To be successful using this strategy, the market needs to be buoyant.
- Add the cost of renovations, air conditioners and gardens to the price – Let’s say you added a new kitchen or back deck to the home. It stands to reason that whatever money you initially out-layed on these improvements you will recoup when you sell it. After all, the buyer is inheriting all your hard work. In reality, while renovations might see some return on investment, you’ll rarely recoup the whole amount. On average you can expect to get back about 65% of every dollar you spent on the improvements, if you are lucky. Plus, that return can vary greatly based on the quality of the improvement and the aesthetic appeal the improvement has.
- Past appraisal will help with the pricing of a home – If you have had an appraisal by a financial institution in the past for a loan extension or refinance and feel their appraisal is accurate, you will be wrong. We often hear sellers say the bank valued it at $ABC and that is what I want to get. In my opinion, the only time a bank gets their valuations right is when they are about to foreclose on a property. The market is constantly changing from day to day, month to month and year to year. Appraisals, even a few months old, are not worth the paper they are written on. Go through the process again, obtain CMA’S and price your home accordingly to the latest sales in your area.
Pricing myths to stop believing when Selling Your Home
Thinking of selling your home? Speak to Gott Realty today!
If you’re looking for a real estate team that is honest, respectful and always acting in your interests, speak to us today about how much your home is worth.
Our team has unprecedented access to local property data and insights, and we are here to help you sell your property for the best price possible with the least amount of stress.
Gott Realty service Albany Creek, Eatons Hill, Cashmere, Warner, Lawnton and Bray Park and many more areas across North Brisbane. Learn more here on our blog.