Many home sellers believe the following myths
1. You always make money when you sell your home. Certainly, real estate does appreciate in value over time. However, the real estate market goes through cycles where prices are rising quickly, where prices are moving sideways or are falling. So, selling your home for more than you paid for it is not necessarily a given and your return on investment can vary greatly by neighborhood or by building.
2. Price your home high to make the most profit possible. Many sellers say to me “I want to price high because you never know if there is that one buyer willing to pay my price!” If you start with some large “aspirational “price you will come down to earth when you realize that your home with the fantasy price won’t sell.
3. If your home is overpriced it is no big deal to lower the price later. There are historical studies that prove that homes that have received price cuts end up selling for less than those that are priced correctly when they are listed. Many buyers that see properties online that have received multiple price cuts steer clear of them because they think there is something wrong with them. If they do make offers they are often much below the last asking price.
4. Pricing your home low means you will not make as much money. Sellers are often hesitant on pricing their homes below the market value. However, I have seen this strategy pay off many times. One example was an apartment at the Century condo on Central Park West. It was priced below market. There were so many competing multiple offers that the apartment sold for over market value.
5. Adding the cost of renovations to your listing price. The truth is you will see some return on your renovation investments typically you will rarely recover the full amount. Also keep in mind that if your renovations are highly personalized then they may have little if no value to a potential buyer.
6. Using a past appraisal as evidence of the value of your home. The truth is that most mortgage lenders don’t accept appraisals that are more than 60 days old. The right price is based on the comparables in contract and ones that just recently sold.
7. Your broker may overprice your home to make a bigger commission. While it is true that a broker’s commission is based on the sales price, very experienced brokers will not recommend overpricing your home. They don’t want to invest a lot of money in the marketing and their time just to have your home not sell. Sometimes in very competitive market brokers will offer to take your home at a much higher price because they fear losing out to the competition. That said choose your broker based on their level of experience and expertise, not price.