Originally posted on Realtor.com by Margaret Heidenry
When it comes to selling your house for top dollar, good advice is as priceless as a vintage bootleg of “Abbey Road.” But bad advice from well-intentioned friends and family can seem a bit more like unearthing an old mix-tape from an ex: deeply personal and more than a little warped.
To help you fast-forward past misconceptions, half-truths, and outright falsehoods, we’ve compiled a list of the very worst home-pricing advice you might actually hear someone say. Be sure to nod, then run in the opposite direction. Run fast.
‘Price the house based on what you feel is right’
Why you might hear this: Nobody but you knows that it took you forever to lovingly nurture those dahlias in your front yard into the best on the block. So naturally you, and only you, know what your home is truly worth.
Why it’s bad advice: A home’s list price should be based on hard facts such as comps and square footage. While your home may have a plethora of lovely intangibles, don’t let emotion cloud what is essentially a very large and important business transaction. Ask your Realtor® for guidance and information to help you home in on the right price.
“The broker should supply a fully thought-out pricing opinion,” says Kathy Braddock, managing director of William Raveis in New York City.
‘Price the house based on what you paid, plus a little extra for profit’
Why you might hear this: Everyone wants to sell a home for a profit, right? That’s what home selling is all about.
Why it’s bad advice: Sorry, what you want doesn’t really matter in this scenario—the only thing that does is what a buyer is willing to pay. And that will be based on the comps, or what similar-size homes in your area sold for recently, says Braddock. And that figure is what the asking price should be based on. Got it?
‘Add the cost of renovations you’ve made to your price’
Why you might hear this: It took you the entire summer—and tons of cash—to lovingly rehab that kitchen. But hey, all that money, and maybe more, should be recouped when you sell, right?
Why it’s bad advice: While your home may have numerous lovely improvements, this doesn’t necessarily mean buyers want to pay for them. Sure, they may foot some of the bill for those new countertops or the swimming pool you added, but not all.
In fact, according to Remodeling Magazine’s 2016 Cost vs. Value Report, you’ll make an average of 64% profit on what you paid for a renovation when you sell your home. And the return on investment varies based on what you’ve done, so be sure to do the math rather than just slap the full price of those renovations onto your asking price.
‘Not in a hurry to sell? Price the home high’
Why you might hear this: Much like Sleeping Beauty, you have time to wait. And someday your realty prince will come—in the form of a fat offer.
Why it’s bad advice: To appropriate the lyrics of a classic Otis Redding song, houses they do get weary—”market weary,” that is.
“If a home is substantially overpriced, it’ll end up sitting on the market for a long time,” says Atlanta-based Realtor Bill Golden, with Re/Max Metro Atlanta Cityside. Once that happens, buyers get wind of the stagnating house and will make lower offers. “In the end, these homes almost always sell for less than if they had priced it right to begin with.”
‘Price your home high, because buyers will come in low’
Why you might hear this: We’ve all been to yard sales. The price tag on that cool chair may say 10 bucks, but we know the owners will actually take 8. Same principle applies to houses, right?
Why it’s bad advice: This may be one of the very worst pieces of home-selling advice of all time. When a home is priced too high, you exclude possible buyers and eventually will have to lower the price. This ends up “making you look desperate as a seller,” says California Realtor Tracey Hampson. As noted above, sellers need to price their home according to past sales of homes within their area that have similar square footage. “If a home is priced correctly, you will get full-price offers and even over-asking-price offers.”
‘If you get a lowball offer, don’t even bother to try negotiating’
Why you might hear this: Someone who comes in way under the asking price just doesn’t have enough dough to ever afford your home. And frankly, certain offers are insulting.
Why it’s bad advice: “If there’s one thing I’ve learned over 30 years of selling real estate, it’s that everyone has different styles of negotiating,” says Golden. Some buyers are bargain hunters prone to making lowball offers. And Golden has seen deals come together even when the initial offer was “completely ridiculous.” Besides, a seller has absolutely nothing to lose by making a counteroffer, even if it’s at full price.