Unfortunately, everyone’s an “expert” when it comes to real estate.
When you’re in the market to buy or sell a house, everybody seems to have a tip, strategy, or piece of advice they’re more than happy to offer up.
And you’ll soon notice, no two pieces of input are ever the same.
I’m not sure what causes this confidence in real estate expertise, but it frustrates me when I overhear a conversation that contains some very bad advice.
There’s one piece of advice that’s been floating around lately, and if you’re unfortunate enough to come across it and use it, you’ll find yourself in a patch of money quicksand you can’t get out of…
I’m talking about quite a common real estate myth that seem like sound advice on the surface, but you’ll soon see how it could KILL any real estate sale you’re working on.
Whether you’re about to list a house or you see yourself listing one in the future, take notes on what I’m about to tell you, because I guarantee somebody will give you this piece of property misinformation…
Here’s it is: “You should price your home higher than what it’s worth.”
The advice I often hear people give each other is for a seller to set the price of their home higher than what they expect to get for it.
It sounds reasonable on the surface.
The idea being that, like in a normal bargaining process, the price is going to get negotiated down to the true market price.
But you are much more likely to end up with a significantly lower selling price than you expected to get in the first place.
That happens for two reasons:
> You could end up chasing the market down
> Your house will be on the market for longer, which buyers do NOT like
Firstly, if you set the price higher than what you should, prospective buyers will simply pass over your property because it’s out of their price range.
So, you say, “Well, I can always lower the price.”
Well, yes, that’s true. However, by the time you realize you need to lower the price, the market could’ve shifted downward, and you’ll find your house lingering on the market longer than you’d like.
Secondly, this changes with the market, but in general, most buyers become suspicious of a house when it’s been on the market for somewhere around 45 days or more.
All of this cumulates and drives the perceptive price of your house down.
So, by setting the price of your property 5% higher than the price you expected to get, you could wind up receiving 15-20% less… and that’s IF the market doesn’t plummet rapidly in that time.
For both of those reasons, you’ll feel like you’re becoming trapped and continue sinking down into the money quicksand you’ve put yourself in by pricing your home too high.
So, the next time somebody offers you that advice, pass along this knowledge so they don’t end up making this common mistake.
