As a real estate professional, I sometimes have to compete with well-intentioned friends and family members offering my clients some not-so-great advice from the sidelines. Most of that advice tends to be aimed at the pricing of the home. It may be the worst real estate advice they ever heard.
Realtor.com® recently highlighted some of the worst real estate advice that real estate professionals say their clients recite to them, including:
- “Price the house based on what you paid, plus a little extra for profit.”
- “Price the house based on what you feel is right.”
- “Add the cost of renovations you’ve made to your price.”
Sound familiar? It’s important that sellers know that pricing a property shouldn’t be based on what their gut says or what they think it should be. A home’s list price should come from comps and square footage. At this point I need to step back and carefully explain to my clients the importance of comps and why real estate professionals use them — before just jumping right in to comp review mode and the price.
Another piece of ‘worst real estate advice’ home owners may hear is advice to price their home higher, despite what the comps say. For example, they may hear:
- “Price your home high because buyers will come in low.”
- “‘Not in a hurry to sell? Price the home high’”
I explain to them the dangers of pricing too high. “If a home is substantially overpriced, it’ll end up sitting on the market for a long time,” says Bill Golden with RE/MAX Metro Atlanta Cityside. If the house lingers on the market, buyers often start making low-ball offers. “In the end, these homes almost always sell for less than if they had priced it right to begin with.”
Indeed, Tracey Hampson, a real estate professional in California, says “if a home is priced correctly, you will get full-price offers and even over-asking-price offers.”
So in a nutshell please beware of the advice of ‘friends’ and trust your Realtor. Their comps are the key. Trust that!