How To Get The Highest Price When You Sell A Home
Q: Gerald, I’ve been arguing with my business partner about what sales price to start with on a house we just rehabbed. We want to get the highest price we can, any suggestions? Reggie, South Orange, NJ
A: Reggie, great question. Like you and your business partner, everyone wants to get the highest price they can when they sell a home. The a mistake that a lot of people make when they sell a home is overpricing their property.
I understand the mistaken logic that many people use when they make this critical error–they figure, if their property is worth say $250,000, maybe I should put the property on the market at $300,000 and see if I get any takers? Unfortunately, overpricing a home is counterproductive to you as a seller and independent studies have shown will normally result in you ultimately getting a lower price for your home.
Here’s why: the key to selling your home for the highest price is to get it in front of as many people as possible who are willing and able to buy it. Willing means they want your home in it’s current condition and location; Able means they can afford your home. If your home is actually worth $250,000 and you price it at $300,000, you will attract buyers who are willing and able to buy a $300,000 home–they will look at your $250,000 home having been looking at $300,000 homes and say no thanks and your property will sit unsold–this is why overpricing a property works against you as a seller.
To make matters worse, since homes get the most attention and action from buyers in the first 30 days the property is on the market to sell, even if you lower the price after overpricing it, you will have missed some of the initial flood of willing and able buyers and the buyers who do show up will be looking for a bigger discount because they will often conclude that there must be something wrong with your home because it has remained on the market unsold for so long.
The key to getting top dollar for a home is first and foremost accurately determining property value right now in its current condition with a comparative market analysis of similar properties (same number of bedrooms and bathrooms in the same neighborhood) that have sold in the last 6 months. After you’ve accurately determined the current market value of your home, use that market value to set your asking price not an artificially inflated price. Using the true market value to set your sale price will attract the maximum number of willing and able buyers and will result in your selling your home for the highest possible price.
Thanks for your question, Reggie. Good luck.
For more real estate tips and information visit my blog at geraldlucas.com.