Part 2 of 3.
Are you selling your San Carlos home in 2014? If so, congratulations! You’re going to reap the benefit of two consecutive years of unprecedented home price growth here in the Bay Area. As we discussed last week in the 2013 Year in Review, home prices have appreciated over 30% on average in San Carlos since 2011, and the economic conditions are still in place for another solid year in the real estate market in 2014. Interest rates are still low, and there are still far more buyers than there are available homes for sale.
But just because this market still strongly favors sellers, it’s still critically important to adhere to the basic best practices of selling your home. In this three-part series on the White Oaks Blog, we’ll highlight several common mistakes that sellers should avoid in this frenzied market. Yesterday, we discussed resisting the urge to cut corners in preparing your home for sale.
Here’s mistake #2 to avoid:
#2: Don’t Massively Under-Price Your Home.
This is a practice that I still see with alarming regularity, and if you’re a regular reader of this site you know that I have strong feelings about it. Whether it’s an intentional marketing strategy, or simply a misjudgement on buyer demand, there seems to be a home listed just about every week that’s so far below the current market value that it raises the eyebrows of both buyers and Realtors alike.
I’m not talking about listing a home 5-10% below market value. It’s the ones that are obviously listed 30-40% below what they are worth that baffle me — the 3BR/2BA home in the flats that’s listed for $999K, or the occasional 4BR home for $1.2M, when everything else similar is selling for so much more. Is it that the listing agent simply doesn’t know the market, or is it an intentional strategy to get as many offers as possible to drive up interest?
Neither of those reasons are acceptable in my book, because in both cases you run the real risk of leaving money on the table. If your agent isn’t local nor well versed in the micro-variations of each neighborhood in San Carlos, there’s no way that they will have an understanding of the true value of your home, let alone what the demand for it will be. That usually results in pricing it too low.
But the intentional strategy of listing a home far below its market value is simply gambling with your profit. As we have discussed before, buyers begin to focus too much on how much over the asking price that they are bidding, and not on what the true value of the home actually is. This practice has become the norm in the super-heated Palo Alto real estate market — but not here in San Carlos. You’re far more likely to be padding the listing agent’s statistics than you are maximizing your profit.
The bottom line is that you should do a thorough and timely analysis of the market value of your home, and price it close to that value (*slightly* below is OK, too.) After all, if there’s a price you have in mind for your house and you don’t ask for it, there’s no guarantee you’re going to get it.
Part III: Don’t Wait Too Long.
Later this week on the blog in Part III of this series, we will talk about the 3rd mistake to avoid if you’re selling your home in 2014 — waiting too long to put it on the market. Traditional wisdom tells you list it in late Spring when everyone else does the same. In the third and final installation of this series, we’ll discuss why this may not be your best strategy.
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