Don’t Make This Mistake When Pricing Your Home

A very common mistake people make when pricing their homes is that they look at the list prices of other homes. For example, say the home down the street from the buyer is for sale. They’ll go up to the home, pull a flier, and look at the list price for it. Then they’ll think to themselves, “They’re asking for $1 million, and my house is bigger and nicer….” In their minds, that means their own home should be able to sell with an even higher list price.

Don’t base your own asking price on the listing price of one other home in your neighborhood.

Do you hear the fatal flaw in that reasoning?

Of course, that logic doesn’t work. Don’t base your own asking price on the listing price of one other home in your neighborhood. Say that identical home down the street from you is asking for $1 million but isn’t selling. Can you use that information to gauge your home’s price? Yes, you can—the fact that that home isn’t selling means that there’s a limit and that you shouldn’t ask for the same price. However, it only says that you can’t get $1 million, not what price you should ask for.

In the end, it’s important not to rely on internet valuations and the prices of other homes for sale to create your own sales price. I recently had a client do that same thing. They said, “The house next door is asking for X, and my house is almost as nice, so I should be able to get X minus $50,000 or so…” The thing was, though, that house that was asking for X had reduced their price two times and still hasn’t sold.

If you want to know the value of your house, the best way to learn is by reaching out to me. I can give you an accurate estimate of your home’s market value and I can explain where I got the number. Look forward to speaking with you soon!