If you’re considering selling your house, it’s crucial to understand this: although it’s still a seller’s market, you can’t just set any price for your listing.
Home prices are generally appreciating, but at a slower rate due to higher mortgage rates, which are reducing buyer demand. Additionally, the supply of homes for sale is increasing. This gives buyers more options, so if your house isn’t priced correctly, it might not stand out.
These factors make the asking price for your house more important now than it has been in recent years.
Some sellers are learning this lesson the hard way, leading to an increase in price reductions. Mike Simonsen, Founder and President of ALTOS Research, explains:
“Looking at the price reductions data set . . . It all fits in the same pattern of increasing supply and homebuyer demand that is just exhausted by high mortgage rates. . . As home sellers are faced with less demand than they expected, more of them have to reduce their prices.”
This issue arises because sellers haven’t adjusted their expectations to the current market conditions. They may not be working with an agent who understands the local market trends, or they might not be using an agent at all. As a result, their pricing decisions are not based on the latest data available, which is a significant oversight.
To avoid pricing mistakes that could deter buyers and delay your sale, it’s essential to work with an agent who truly understands your local market. The right agent can help you avoid common errors such as:
- Setting a Price That’s Too High: Some sellers have unrealistic expectations about their home’s value, basing their price on gut feelings or personal financial goals rather than data. An experienced agent will ensure your price is based on factual information, increasing your chances of getting it right.
- Ignoring Actual Selling Prices: Without an agent’s assistance, some sellers may use incorrect comparable sales (comps) in their area, leading to a misjudgment of their home’s market value. An agent has the expertise to identify accurate comps and will use them to provide valuable insights on competitively pricing your house for both you and potential buyers.
- Overvaluing Home Improvements: Sellers who have invested heavily in home improvements may overestimate the impact of those upgrades on their home’s value. While some improvements can enhance a home’s appeal, not all will yield a high return on investment. An agent will consider both your upgrades and the preferences of buyers in your area when setting the price.
- Disregarding Feedback and Market Response: Some sellers may resist lowering their asking price despite the feedback they receive from open houses. An agent will emphasize the importance of being flexible and responsive to market feedback to attract qualified buyers.
Ultimately, accurate pricing relies on current market conditions, and only an agent possesses the comprehensive data and information needed to determine the right price for your house. A skilled agent will use their expertise to create a pricing strategy based on these conditions, ensuring your house is priced to sell effectively. This approach helps you avoid missing the mark.
Bottom Line
Setting the right asking price is more crucial today than it has been in recent years. To prevent costly mistakes, let’s collaborate.
