Naturally, all sellers want to get the most money possible for their homes when they sell them. There is one item that, if not perfect, will cause your home to sell for less than it should — that single item is the price.
Pricing your home properly to begin with is without question the single most important factor to selling your home for top dollar. It is a delicate balancing act that, when done properly, positions your home perfectly in the marketplace to sell for the absolute highest possible price. When the home is priced too low, it will sell quickly but for less money than it should. When the home is priced too high, it will sit on the market for a long period of time and ultimately sell for less money than it should.
The biggest mistake I see all the time by owners selling, as well as by real estate agents, is overpricing a home to start with and having to reduce the price multiple times. When a home is listed for sale, it reaches the highest number of potential buyers the first few days it is on the market. If a home is dismissed as being overpriced early on, you will lose potential buyers.
Typically, buyers will flip through listings online; they look at the main home photo first, then they look at the price. If the potential buyer does not like either of those items, they will move on to the next listing. Be honest: How many times have you done that? I do it all the time.
The challenge is pricing the home properly. You can use the Zillow Zestimate; you can see how much a neighbor’s home is listed for and price a home the same, or you can just price the home at the amount of money you “want” to get (or need to get) for it. I’m sorry to tell you that none of those methods work, and they certainly will not help you sell a home for top dollar. Let’s take a quick look at why these methods don’t work.
The Zillow Zestimate is a very popular, well-marketed tool. Zillow is in the business of generating leads for real estate agents, and it is very good at it. The Zillow Zestimate is an interesting tool, but it is not usually accurate. The entire system is computerized and based off of public records that are sometimes incorrect. There have been many occasions when I have come across public records in which the number of bedrooms, bathrooms or the square footage of a home has been incorrect. All of these errors lead to inaccurate Zestimate results.
In my opinion, the biggest issue with the Zestimate is its inability to take into account items such as home features, upgrades and the condition of a property. Those items require an actual human to take an in-depth look at your property and determine how it truly compares to another property. Once that determination is made, proper adjustments to the value are made.
I’m not here to bash the Zestimate. It works OK for general property value estimates, especially when the home is in a subdivision of similar homes. A home is most likely the single largest item you will sell in your lifetime. Do yourself a favor and do not use the Zestimate as a pricing tool for your home — it could end up costing you tens of thousands of dollars.
Looking at how much a neighbor’s home is listed for or seeing how much other properties currently for sale are listed for does not work because we want to know exactly what homes have sold for, not what they are attempting to sell for. The only thing a home still for sale or “active” tells us is that the home is probably overpriced. The most accurate way to predict what a home will sell for is by finding out what similar homes sold for.
Listing your home for how much you want or need to get is wrong. Truthfully, it does not matter what you want or need to get for a home. That is a poor pricing strategy. The fact is, a home is worth exactly what a qualified buyer is willing to pay for it. What you want or need has no bearing on that.
The key to selling a home for top dollar is to strategically price the home. To do that, you need to take a detailed look at similar homes that recently sold in the area. Hire a real estate agent who is an expert in the area where you are selling your home. Know the average current days on market for the homes that sold. Using this data, interview real estate agents and find out how many days on market their homes that are currently for sale and recently sold are averaging. Also find out how many price reductions were needed and how much those price reductions were. An agent who has an average days on market higher than the current sold average or multiple price reductions that total more than 10 percent is either not very good at marketing or is overpricing his listings.
A great real estate agent will know the local market and complete a comparative market analysis (CMA). This will allow the real estate agent to accurately compare a home to recently sold homes on the market. The trick is to price a home so it is considered to be the best value in the price range.
Remember that if a home is overpriced compared to the other homes on the market, all you are doing is helping other people sell other homes by making their homes look like a better value. The guidance of a high-quality real estate agent can help homebuyers land on the most strategic price and get a home sold for top dollar.
Jeff Gould has been involved in the real estate industry for more than 30 years and is a top-producing Realtor in the Tampa Bay area.