When selling a home, it is reasonable to want to command the highest price possible. Most likely, you need the money to purchase a new property or to help cover other expenses. If a real estate agent recommends that you lower the price of your home, this can be a tough piece of information to hear. Here's what you need to do if your real estate agent thinks your home is over-priced.
1. Discuss Options to Make Your Home More Attractive to Prospective Buyers
If you feel like you absolutely cannot lower the price of your home (perhaps a lower sales price would require you to bring money that you don't have to close on the property), talk to your real estate agent to see if there is anything you can do to garner a higher sales price.
Small, inexpensive changes, like cleaning up your landscaping, repainting rooms, decluttering, and repairing broken items can all help you receive more money for your home. There is also evidence that removing signs of your pets may increase your home's selling price. Potential buyers may see a litter box or pet dish and assume that your pets have caused some type of damage to your home.
2. Learn More About the Dangers of Keeping Your Price Too High for Too Long
Some home sellers may believe that there are no risks to starting with a high listing price and making reductions to the price, if needed. However, this strategy can significantly reduce what price you ultimately receive for your home. Remember, real estate markets are not static; prices are constantly going up and down.
If your real estate market is on a downward trend, listing your home too high will cause the final sales price to reflect this trend. For example, assume that you start by listing your home at $300,000. It should have been listed at $275,000 based on comparable homes.
After 6 months, you drop the price to $275,000. However, the real estate market in your town has also gone down and prices have now decreased an average of 10 to 20 percent. Instead of being able to get $275,000 for your property, your listing price now needs to be reduced again to reflect changes in the market.
3. Weigh the Costs of Carrying the Home Against Your Potential Profit
If you have already purchased another home, you need to take into account the costs of carrying the home against your potential profit. For example, if your total carry costs (mortgage, maintenance expenses, taxes, and insurance) are $1,500, staying in your home an additional 6 months will cost you $7,500. Sometimes, taking a lower price can actually help you receive more money in the long term.
Experienced real estate agents are there for you to talk to. If you have questions or concerns during the home selling process, don't be shy to ask.