Pricing advice for home sellers, the story of Peg.
Pricing a home correctly right from the start is so important to the success of a sale. To bring the importance of that home, I would like give some pricing advice for home sellers in the form of a story. A story about a seller who stuck to her guns that XXX was the price that she needed and she wasn’t listing for anything less.
It all started almost 5 months when a Peg asked me to help her sell her property. Peg had tried to sell her property multiple times before and failed each time because of overpricing. Despite helping her with a lower listing commission and rebating her back part of my commission back when she bought the next home, she was sticking to her guns on the asking price.
Three days later the home is listed for sale with another agent at the price Peg wanted.
In a fast moving market, especially in her price range, if the home was priced well it should’ve sold in just a few weeks. But go figure, it didn’t.
A quick sale was important to her plans because she already found the home she wanted in a private sale and the seller was willing to give her some time to get her property sold.
Well one month turned into two months, then three and then four months. Then finally the market caught up to her price and Peg got the home sold for close to her asking price. You might be thinking, well I’m glad Peg stuck to her guns, the heck with your so-called expert pricing advice for home sellers, she got her price. But not so fast.
First, during the 4+ months the home was on the market the Feds raised interest rates twice and since she had to sell her house first she couldn’t lock in the lower rates.
Second, when Peg told the other home owner she was ready to buy, she decided she didn’t want to sell anymore. So now Peg has to go out and find another home quickly because the buyers were closing on her home in 4 weeks.
Peg ended up having to buy a home above the price point she was comfortable with. It was high enough where she no longer had the 20% to put down on the home and now she had to deal with PMI. But not to worry, the bank would just roll into her loan and charge her a higher interest rate.
So let’s recap. First the Feds raised interest rates. Then Peg had to cover the PMI with an even higher interest rate. And let’s not forget the higher priced home she had to buy. Roll that all in together and that simple mistake of not pricing the home correctly the first time will cost Peg tens of thousands over the life of her loan. Ouch!
So here’s my pricing advice for home sellers!
Don’t be a Peg, price your home correctly from day one of the listing. Doing otherwise can cost you tens of thousands of dollars!