If you're thinking about selling your home, here's what you really need to know: Even though it's still a seller's market today, that doesn't mean you have free reign over your asking price.
While home prices are still rising in most areas, the pace of appreciation is slowing as rising mortgage rates are squeezing buyer demand. At the same time, the supply of homes for sale is increasing, which means buyers have more options and, unless the price is right, your home may not stand out as much.
These two factors combine to make a home's asking price even more important than it has been in recent years.
And some sellers are finding this out the hard way, leading to further price cuts. Mike Simonsen, founder and president of ALTOS Research, explains:
“When we look at the data set of price reductions, they all fit the same pattern of increasing supply and homebuyer demand dried up by high interest rates. Home sellers are facing less demand than expected, so more sellers are having to reduce their prices.”
That's because they haven't adjusted their expectations to the current market. Maybe they're not working with an agent and don't know what's going on around them. Or maybe they're not using an agent who makes it a priority to be an expert in the local market. Either way, they're not making pricing decisions based on the most current data available to them. This is a mistake.
If you want to avoid pricing mistakes that can scare off buyers and delay the sale, you need to work with an agent who really knows your local market. The right agent can help you avoid these mistakes:
Pricing too high: Some sellers have unrealistic expectations about the value of their home. That’s because they price based on gut feeling and bottom line, not data. An agent can help you base your price on facts, not opinions, so you’re more likely to set a fair price. Not considering the actual selling price of your home: Without an agent’s help, some sellers will misuse comparable properties in the area and misjudge the market value of their home. Agents have the expertise needed to find true comparable properties. And they can use those properties to provide valuable insight into how to price your home in a way that’s competitive for you and future buyers. Overvaluing your home’s improvements: Sellers who have invested a lot of money into home improvements may be overestimating how much those improvements will affect the value of their home. While certain improvements can increase the appeal of a home, not all improvements will have a great return on investment. An agent will take into account what you’ve done and what buyers in your area actually want when setting your price. Ignoring feedback and market response: Some sellers may feel uncomfortable lowering their asking price based on feedback they get at an open house. Agents remind sellers how important it is to be flexible and respond to market feedback in order to attract qualified buyers.
Ultimately, accurate pricing will depend on current market conditions. And only an agent has all the data and information you need to find the right price for your home. The right agent will use their expertise to create a pricing strategy designed to get your home sold based on current market conditions, so you won't miss the mark.
Conclusion
A fair asking price is even more important today than it has been in recent years, so make sure you work with an experienced real estate agent with a proven track record, like The Belt Team, to avoid costly mistakes.
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