How not to price your home:
- Take your mortgage balance.
- Add your credit cards.
- Throw in your cars.
- Add a generous portion of all the money you borrowed from relatives.
- Pile on your down payment for that other house you have your eye on.
- Last but not least, give yourself an extra 50 grand just for being you.
- Get a blank look on your face when you are told that the buying public doesn't care what you owe.
- Wait some more.
- Decide you'll stay after all.
Here's a better plan:
- Find out what homes like your have sold for in the past 90 days
- Price the house at that number or 5% less.
- As my son's teacher says "you get what you get and you don't get upset."
- Pack your bags.
The buying public is utterly ambivalent about what you owe to whom as it relates to pricing your property. They only care about their own needs. What you need isn't on their radar, and if you aren't priced in line with the current perception of value, your listing will get stale and sit unsold for months as you chase the market.
Chasing the market is always being one price point behind what the public is willing to pay. You enter the market at $599,000 when you really ought to be at $549,900. You lower to $575 when the market for the house is $525,000. By the time you hit $499,000, it could be a year later and the public isn't willing to pay more than $450,000. Each price drop seems harsh, but your real enemy was starting out too high.
Sellers are in a war of attrition with buyers who lurk before they call, call before they look, and look at everything before they buy. You won't get a call, look or offer until your price conforms to what the public deems fair. The only offers overpriced homes get is low ball offers from bold types who wouldn't pay as much as fair minded people would on a fairly priced home. The only way to win the battle is to price as aggressively as possible and not allow your ego or personal preferences to cloud your objectivity.
Easier said than done!