Issue Date: August 3, 2005

Pricing Mistakes By Sellers

By Jody Zink
Licensed Realtor in Ohio & Michigan

The goal: getting the highest possible price in the shortest period of time.

Consider this: before putting your home up for sale, a Realtor can give you an estimate of what your home would go for on the current market by using a Comparative Market Analysis or CMA. This report compares your home to similar ones that have recently sold in the neighborhood. Square footage, style, age of the home and the number of bedrooms and bathrooms are just a few of the items taken into consideration.
It should come as no surprise that different Realtors can potentially recommend different asking prices. Considering our goal, some homeowners will automatically list with the agent who touts the highest price without question. As a seller, however, it may not be in your best interest. Here’s why:

Your home is invisible. The Multiple Listing Service (MLS) will search for homes based on a buyer’s criteria, including price. Pre-approved buyers know how much they can spend. If your home is listed even a penny over that amount, the MLS search will not find your home and the perfect buyer could be lost! This can be tragic. A reasonably priced home around the block may not be as nice, but could win out because the buyer never saw yours.

Realistic sellers win. When I represent buyers, the most frequently asked question is this, “How long has it been on the market?” The longer a house sits with a sign out front, the more a buyer perceives there’s either something wrong with it or they could buy it below market value. Seeing that a home has sat for months with regular price changes could indicate the property may be a little stale. That may not be the best way to market your property.

Price it right the first time. From the time the sign goes in the yard, studies show most marketing activity happening within the first three weeks. Wasting your best marketing time on an overpriced house won’t likely get you the result you want. Your home’s first exposure to the market can be the most crucial.

The higher the price, the higher the expectation. You’re competing with other homes on the market. Some are professionally landscaped and decorated. Others have been maintained flawlessly. Help yours measure up. Buyers often choose their home based on emotion. If buyers do see your home, it’s likely they can afford it. But other homes in that price range could likely appear better, especially if they’re priced for what the market will pay.

But wait! We’ve done so much work! Improvements can help sellers justify a home’s price, but when it comes to resale value some pay back more than others. Surveys show that adding a bathroom or remodeling a kitchen typically pays back at least 90 percent of the costs. A new furnace often recoups 100 percent of the cost, new central air can bring around a 75 percent payback. A pool or finished basement usually pays back less than half. Consider why you’re improving.

Price. Price. Price. The right price brings the right buyers.

Jody Zink is a licensed REALTOR in Ohio and Michigan with the Loss Realty Group. Her column appears every other week in the Toledo Free Press. She can be reached at jody@jodyzinkrealtor.com or 419-725-1881.