If you’re thinking about selling your home in Austin, the top things are your mind, aside from you’re next move, are selling your house for the highest amount of money. And maybe as quickly as possible, depending on your situation.
Pricing a home is an art, since there are many factors.
And in Austin’s current super strong seller’s market you want to be aware of these pricing myths.
If you buy into these home pricing myths, you could find that selling your home is more difficult and in some cases not possible.
Thinking Pricing Your Home Higher It Will Sell For More
If you think overpricing a house is a good idea, even in Austin’s sellers market, you have a another thing coming. And it’s not more money!
It is more likely to leave your home sitting on the market for a long time. Even a few thousand dollars over the market value can put off buyers.
Another factor can be how buyers search for properties. If your home is priced above an often chosen round number, like $700,000, and your home is on the market for $705,000, your home will be less visible to buyers.
So even if your home is valued higher, it might not be advisable to list it at exactly the market value, let alone push it higher.
Ignoring Comparable Sales Because You Feel Your Home is Worth More
Believing your home is worth more than what the market will pay for it is a huge pricing mistake.
Since your home is special to you, you aren’t the best person to judge its value.
When pricing a home, all factors must be made objectively.
A comparative market analysis (CMA) carried out by a qualified real estate agent will show what similar homes sold for. This will help provide an understanding of how much your home sale could achieve.
In a volatile market, like Austin’s, it’s even more important to use the most recent and close comparables and even ones that are Pending.
However, the findings of this analysis have to be adjusted to the differences of your home. Since your home probably isn’t exactly the same as the others in the analysis, the price should be changed accordingly. Your property could sell for more if it has better features, more bedrooms, more bathrooms, or be on a larger lot, for example.
Your home could sell for more if there is less competition to the comparable sales. If there is more demand from buyers, you can get more for your home than it would otherwise be worth.
Paying Too Much Attention to Online Valuations
Zestimates, Redfin Estimates, and millions of real estate agent ads offering to give you an instant home valuation.
Who should you believe?
With online valuations easily available, you may think your home is worth far more (or less) than it really is.
An automated valuation that uses your location and some information about your home, is never going to be that accurate, however. It isn’t going to come close to the comparative market analysis from your real estate agent.
Online valuations can raise your expectations above what is realistic, leaving you unhappy with the comparative analysis. Your real estate agent will consider many more factors when finding the best price for your home.
These types of valuations can give you a general idea of what your home could be worth, but you shouldn’t pay too much attention to the results until a good real estate agent gives you a proper home evaluation.
Expecting the Cost of Upgrades and Renovations to Add to the Price
Another common home pricing myth is assuming the cost of renovations will completely be paid back in the sales price. You shouldn’t expect the full cost of improvements you’ve made to be fully represented in the price you sell the home for.
While some home improvements can add value to your home, you might only find a fraction of the amount you’ve spent actually added to the value. Some renovations can actually have a negative effect on the price of the home, however.
Overpricing and Thinking You’ll Eventually Get It
The longer your home has to sit on the market the more difficult it is to sell. Potential buyers will look at the listing seeing that it’s been on the market for a long time, and naturally assume that there’s something wrong.
Potential buyers will convince them your home has a serious problem or it is priced to high.
No buyer wants to give you a low-ball offer on an over-priced, because they either don’t want to feel cheap or waste their time.
Not only that, the longer the home remains on the market, the less likely it is going to get the price the Seller wants. Buyers will assume that the seller is more likely to negotiate or take lower offers because they are more desperate to sell.
Even in a strong seller’s market like Austin’s you can’t expect buyers to pay more than the home is really worth. This is unlikely to happen, and even if it does, you may find the sale doesn’t get to closing.
Unless you purchase a home in all cash, the lender will want a home appraisal, the sale could fall apart when they assess the value lower than the offer price. If the buyer is financing and still really wants a house, they can attach an “appraisal waiver” to their offer.
In this case, the buyer is saying they are willing to pay in cash the difference of their offer and the appraisal from the lender.
If You List It, They Will Come
Field of Dreams is one of my favorite movies. Remember, one of the lines “If you build it, they will come.”
Well this doesn’t apply to listing your home.
It can be easy to assume that it doesn’t matter how long your home stays on the market.
After all, you will eventually find a buyer willing to purchase for the price you want if you just wait long enough, won’t you? The truth, however, is the other way around. Sitting around waiting is another common home pricing myth.
Receiving Offers Quickly Means the Home was Priced Too Low
Multiple offers!
Every real estate agent and seller wants to experience the excitement (and stress) of receiving multiple offers on a listing.
However, as a seller you might think that receiving offers quickly is a sign your home was priced too low. Rest assured, in a seller’s market this is rarely the case.
As soon as your home is listed, it will be seen by hundreds and even thousands of potential buyers. There is no better time to get an eager buyer than as soon as it’s listed. With the growing list of 3rd party real estate websites, you could get offers on your home quickly.
This will be particularly true in a seller’s market, where buyers are waiting for homes that meet their requirements, being sold at the right price. If your home has been priced competitively to attract buyers, you will start getting offers quickly.
As a seller, you are looking to get multiple offers. This puts you in a position where buyers will have to compete to get your home. This could drive up the price, but only if the starting price attracts buyers in the first place.
Not Using A REALTOR To Price Your Home
The most part about pricing your home and reviewing offers as they come in, is working with a great real estate agent.
In markets like Austin’s, conditions change week to week. In other words, your home price this week could be very different next week.
For example, typically in Austin, we saw appreciate rates of 4-8%. From July 2020 to July 2021 the appreciate rate was 34%.
As a home seller, you want to be made aware of these ever changing market conditions to get top dollar for your home.
Selling and Pricing Your Home In Austin, TX
It’s easy to believe some of these home pricing myths, but since this is a highly important factor in selling, you need to listen to the experts. Get too drawn into some of these myths and you could find your home remaining on the market for much longer than it needs to be. In fact, it could remain on the market until your listing agreement expires and never sell.
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