How to price a home for sale is a very important question and making a mistake here can cost you thousands, or tens of thousands of dollars. You might be asking “can’t I just go to Zillow or Realtor.com or some other website to find out the value of my home?” Well…. you could, but…slow down here. There’s a lot of money at stake, so let’s look at the bigger picture.

Chuck Shaver, a local Realtor® here on the north side of Orlando and has been one of the top listing agents in the area for many years and works almost exclusively with those selling their homes. Here he provides 7 tips to consider, and then, towards the end, he shares one tip that can literally save you thousands, or tens of thousands of dollars, so be sure to read through for that one.

Tip #1

The first thing to consider is your objective. Now this one may seem obvious, even boring, but IT MATTERS, so hang with me here. Do you NEED to sell quickly? Maybe you’re purchasing a home that is contingent upon this home’s sale. Maybe it’s an estate situation and there is no rush whatsoever.

I met with a seller just the other day that was desperate to get out of her home and I practically begged her not to just give it away. She was driven by her emotions and wasn’t thinking clearly. She had an investor that was about to take her for a ride. Fortunately, she eventually made a rational decision, and I was able to help her with a less conventional option that worked for her and her particular situation.

Just about every seller that I meet with tells me that they NEED the money. But it doesn’t really matter whether they NEED the money or not. Whether they used their children’s college savings plan to buy it or won it in a poker match doesn’t matter to me. A home is worth what it’s worth in the current market. If you NEED to sell, then you may need to be more aggressive with pricing it, so that you’ll get a buyer sooner rather than later. I’ll have more on this subject in a bit.

Tip #2

The next tip when determining how to price a home for sale, avoid pressing “the easy button”. Most people thinking of selling their home just call a local Realtor® and hope for the best. But what if you don’t have a personal relationship or confidence in that Realtor’s expertise? Maybe they weren’t personally recommended, or maybe it just didn’t feel right? Maybe you’re thinking of trying to sell your home without a Realtor®? Of course, this is a riskier option, but a viable option, nonetheless.

This is where so many home sellers simply turn to some website like Zillow or Realtor.com, or any of the dozens of them. Many of them are based in California, or who knows, maybe Indonesia, but they’re usually NOT here in the Orlando area where I work and sell homes. Although they rely on computer data and some algorithm, a computer simply should not be trusted to determine the value of your home.

I know of many neighborhoods that change drastically from one street to the next, and I’m betting that you do, too. Using some website to determine the value of your home is akin to putting on a blindfold and throwing a dart at a small spot on a wall. You MIGHT hit that spot, and it’s more likely that you’ll still be able to hit the wall, but that’s not good enough for me if I’ve got hundreds of thousands of dollars on the line.

Tip #3

Don’t overvalue features or upgrades in your home. I understand that you may have just spent $70,000 on that beautiful swimming pool, but you’ll almost NEVER get that back when you sell your home. A buyer or an appraiser might give just $15,000 or $20,000 for that pool. That upgraded kitchen that you spent $75,000 on? Well, I hope you enjoyed cooking in it, because it’s unlikely you’ll get that money back.

I know that you spent days painting the tray ceilings in the Primary bedroom suite when junior slept in his crib nearby, with the most expensive paint in the world, and that your memories, sweat and tears are all throughout that home, but those things have much less value to a buyer, than they do to you.

Before I get to one of the most important tips when pricing a home for sale, if you’d like to know the value of your home anywhere here in Central Florida, give me a call or fill out the contact form. Of course, my team and I help buyers, too.

Tip #4

Remember that determining the value of your home is a BUSINESS DECISION. Most buyers don’t value YOUR memories. YOU might appreciate the hundreds of beautiful bromeliads and their beautiful colors that cover the backyard, but someone else may consider them a curse, they may just pull them out like weeds. That expensive paint I spoke of earlier? A potential buyer might HATE it and have to paint right over it with cheap Walmart paint.

Be objective here. Have someone that is willing to look you in the eye and tell you what THEY think of your home, without fear of reprisal, come by and share some honest advice. Maybe you don’t think there’s a dog smell, but…maybe that’s because you’ve always had dogs and you’ve lived with it for so long. Put yourself in a potential buyer’s shoes that’s never owned a pet. It might be an issue FOR THEM and failing to recognize this could be costly when determining how to price a home for sale.

Pay attention to THE DATA. There are usually nearby homes that will provide an indication of what your home will be worth and sometimes sellers, based on emotion, ignore the data. Ask your Realtor® for data that will point to what your home is ACTUALLY worth, not what you WANT the value to be. Things like upgrades and major features sometimes impact value, as do other factors like datedness, deferred maintenance, and old roofs, which can also impact the value of your home if buyers cannot obtain financing due to one of these factors.

Tip #5

Don’t underprice your home. This seems obvious, but there’s more to this one. I’ve heard it said that if I underprice a home that I can create a bidding war and could end up getting more. While it is possible, but so is winning big with a Powerball ticket. It’s a risky endeavor and, if that perfect buyer DOESN’T walk though that door in short order, you could end up in a bad situation.

Maybe you DO get a buyer, and then THAT deal falls apart. Maybe from inspections, or their financing falls through. What then? Well now you’ll likely have buyers being suspicious of what’s wrong with it. They may be thinking that if it didn’t sell at THIS PRICE, there’s GOTTA be something wrong. Then, you’re dealing with a damaged goods situation, and that’s just not a good place to be.

This one is really market dependent and can be less damaging in a seller’s market than in a buyer’s market. If I were considering this, I’d definitely be asking my Realtor® about IF it could be a good option for me and MY situation.

Tip #6

Don’t forget the reason you decided to sell your home in the first place. Maybe you’re downsizing because you don’t need those 4 bedrooms anymore, or maybe your financial picture has changed, and you just cannot afford this home. Maybe you’re tired of the rental headaches or just want to move to Florida for that sunshine or a better lifestyle.

There are a thousand reasons people sell their homes. Tip #7 will take this one a step further, but the process of selling a home can be a stressful one and it’s wrought with all sorts of risks, so be sure you have the right Realtor® and make sure you don’t lose focus of the reason you’re pricing your home to sell in the first place.

Tip #7

Although there are several components to it, the single most important tip when determining how to price a home for sale is to avoid overpricing your home. This is one that I see more than any other and it’s the one that I see costing sellers thousands of dollars all the time. This issue is often the consequence of sellers not looking at their home from an objective perspective (see tip #4). I hear home sellers all the time saying, “I can always come down” and “I’m not in a hurry”.

But home sellers often fail to consider carrying costs of that home. Let’s say the home is vacant and the utilities of a vacant home are still a couple hundred bucks. Taxes may be $500 or $600 bucks a month. Insurance? There’s another $300 bucks a month. Homeowner association dues could be a couple hundred bucks, too. Then there’s maintenance, that fence needing painted, the pool pump, lawn maintenance, and all that. This is LOST money EACH AND EVERY month that a vacant home sits on the market.

As I write this, I’m working with a seller of a vacant home that has carrying costs of nearly $2,000 bucks a month, but he doesn’t want to lower his price because he doesn’t want to LOSE money, he’s neglecting the fact that every month his home sits on the market that he’s bleeding $2,000 bucks!

Maybe your home isn’t vacant, but they’re still expenses you’re incurring while attempting to sell your home for whatever reason that was back in tip #6. If you want to get the most for your home, price it properly as soon as it hits the market, as doing this will likely provide a higher net selling price. This is the single most important tip that I share when helping sellers’ price their home for sale in an effort to get them top dollar for their home.

Another consequence of overpricing a home for sale is that buyers are WELL AWARE of homes that have been sitting on the market. Do you think a potential buyer is going to feel THE NEED to act quickly and make a STRONG offer on your home if it’s been sitting on the market for an extended period of time? I can tell you from years of experience…they don’t.

So…yes. You CAN always lower the price of your home, but don’t forget that there could be a consequence of waiting to do so. In a seller’s market, sellers are often punished when their homes sit on the market for a while. Home sellers sometimes forget that there are buyers waiting for YOUR home before it comes to the market, so pricing your home above market value will send them away, still searching for the right him in their price range.

To sell your home for top dollar, a seller should want a buyer to have the fear of missing out, and that just doesn’t happen when a home has been sitting on the market for…even 20 or 30 days. By this time, buyers are aware that nobody else has wanted the home and often question if they do either. Maybe you have dropped the price of your home significantly and it’s now priced aggressively, but potential buyers are not always aware that you’ve significantly dropped the price.

When you put your home on the market, PAY ATTENTION to what’s happening. If potential buyers aren’t coming to your home, ask yourself why? Is my home being marketed on a local multiple listing service? Is professional photography and drone footage being utilized? What about video? Social media? I could go on and on here. The point is that you need to know WHY potential buyers AREN’T walking through the door.

In our current real estate market as of today, we’re in a Seller’s Market, and if we don’t have activity in the first 4 or 5 days, it’s obvious that something is wrong. I then reach out to my customers and try to help them understand the consequences. Sometimes they get it…and sometimes they don’t.

In this market it’s pretty clear that the longer a home sits on the market, the lower the selling price usually is. It’s a cold, hard, fact, and it saddens me when I’m unable to help some of my sellers understand because I’m sometimes just watching them throw their money away.

Published on January 04. 2024 / Tags: Buying and Selling homes, Pricing your home, sellers, Selling homes, Tips to selling your home / no comments.