One of the toughest aspects of selling your house without using a real estate agent is setting the correct asking price for the house. If a house is priced too high, even by a few thousand wet carpet Brisbane dollars, the house may sit for a long time. Many homeowners wrongly think, “I can always come down in price so by setting the price high so I’ll have room to negotiate.” That approach, which is often used, is not a very good one.
When your “For Sale by Owner” (FSBO) home ends up sitting on the market for months without a good offer one of the first things you wonder is if your price is too high. It very well may be. The house may not be worth what it was appraised for by the lender, nor is it worth what the same as the house across the street recently sold for. A house is only worth what someone is willing to pay for it.
Look at the Facts
Having made those statements, here’s what you should do: Think about how many qualified buyers have looked at your house. How many of them have made valid offers on your home? If buyers have been coming to see your house, but have not been making offers, or if no one is coming to your open house presentations, the problem could very well be that your home is overpriced. How long has it taken other homes in a similar price range to sell in your area?Â If your home has been on the market for at least half the average days on market it might be time to cut your price. The longer your house stays on the market, the less attractive it will be to buyers.Â Questions arise when a house has been on the market for more than a couple of months, even if the price is the only thing wrong.
There’s another important consideration. Others will use your overpriced house against you to sell their house. They will do something like this: “The Jensens are asking $450,000 for their house. I have the same size house with a larger lot and I’m only asking $425,000. Mrs. Buyer, you will save $25,000 and have a larger yard – if you buy mine.”
Do Some Research
Pay attention to what is happening in the real estate market in your area.Â Are there more listings in your area than there were last year?Â If there are, you will have to be a little more competitive in pricing your home. Visit open houses of similar homes for sale in your area and see how they compare to yours. Take note of the negative and positive aspects and use those factors to gauge what your home should really be priced at. Review your property and selling price objectively and ask yourself “if you were in the market to purchase a new home would you pay your asking price”?Â By asking yourself this question, you might come up with an answer about resetting your asking price. Do not let your pride or emotions cloud your judgment. Consider your home from the point of view of someone who has no emotional attachment to the home.
If you need to keep the asking price of your home you might consider offering other incentives to get a buyer’s attention.Â You might offer to pay part of the closing costs. Some lenders have a maximum amount that the a seller is allowed to contribute (generally around 3% of the selling price). If your budget allows it, maximize your contribution to the closing costs.Â This will decrease the amount of cash the buyer has to come up with and often makes the deal look more attractive.Â Talk to your lender to see what king of incentives can generally be offered. Be creative and ask the right questions such as: How much of the down payment may I give back to the buyer?Â Can I offe, to make part of the buyers payments for a couple of months?Â Lender underwriting guidelines are always changing so be sure you have up-to-date information. If after careful review you decide to reduce the price on your home, advertise the new price, and call the buyers that had previously expressed interest and let them know about the lower price. You might find that buyers are a little more interested in your house at the lower price.
Pricing your house correctly is probably the most important part of a successful sale. Successful home sellers have found that the correct pricing of their property is the key to selling fast. Instead of pricing your house so that you have “bargaining room”, price it to sell so you can move on. Time is very important – each day spent holding on to an overpriced house means the more money you lose in holding costs.