8 Common Causes of Inflated Home Listing Prices
Sure, we all want to get the most bang for our buck when selling a client’s home. But there are a few common pitfalls that cause both sellers and agents to overvalue their properties. Be careful to avoid these 8 common causes of inflated home prices to more accurately assess your client’s home value.
- Over improvement
Improvements should be made for enjoyment, not just resale. A seller cannot add an item to a home, select it to their style, use it, and then expect a buyer to pay the original cost.
- Maintenance vs. Improvement
A new roof on a 25-year-old home is not an improvement, it is maintenance! Adding a third stall to a two-car garage is an improvement.
An owner’s need for money does not increase the value of the home. Would you pay $5000 more for your next home because the owner needed $5000 more?
- Paying more for next house
Values are location specific. High values in the destination do not increase the value of the existing home. Whether you are moving to New York or Alabama, there is no effect on the price of your current home.
- Lack of factual data
Base the opinion of value on recent documented sales, not neighborhood gossip. Neighbors can be heard saying, “They got their price.” When in fact, they did get their price, but may have paid $3000 in closing costs for the buyers or $5000 on replacing carpet.
- “We can always come down”
Some buyers may offer low, but they will do that at ANY price. Sellers are more likely to successfully negotiate to a fair sale price if the original offering is not over-inflated.
- Ego pricing
This is the notion that “My house is better than all those other homes.” The seller may indeed have a superior property, but don’t let their nostalgia get in the way of accurate pricing. It’s also critical to adjust where the home is not superior, too.
- Location, location, location
The golden rule of real estate. Price, terms, condition, and marketing can all be changed. Location will remain the same.
Be careful to avoid these 8 common pitfalls that cause sellers to have an inflated sense of home worth.
About Larson Educational Services:
Utilizing 30 years of real estate training and professional education experience, Florida real estate school Larson Educational Services is the premier provider of Florida real estate licensing, exam preparation, post-licensing, CAM licensing, mortgage loan originator licensing, and continuing education in Southwest Florida. Classes are available in Fort Myers, Naples, Sarasota, and online.
Florida Real Estate School Larson Educational Services
1400 Colonial Blvd. Suite 44
Fort Myers, FL 33907