The Prepared Seller - For Sale by Owner Pricing Issues

Sellers normally evaluate listing real estate for-sale-by-owner with the sole intention of saving money on commission. Experience has proven that it may actually result in less savings than hoped for... for sale by owner may result in overpricing by Charlotte sellers. Below are a few things for sellers to consider before making the decision to do it alone.

(Asking $650,000 As-Is Condition)

Correct Pricing

The real estate market constantly fluctuates. Pricing will impact market time, what price it finally sells for, and whether it sells at all. Real estate brokers have the resources and experience to help homeowners with marketing value based on their home features, location, and targeted time frame, and to adjust pricing as required based on changing market conditions.  My article on the dangers of overpricing real estate in Charlotte take a deeper dive into this issue.

Comparable Properties

Selecting similar properties is the most important step to pricing. Sellers generally commit several mistakes when it comes to the following:

• Looking back to the price of neighboring properties from years past.
• Using the price of their own home from a past market analysis.
• Utilizing varying styles or types of homes (i.e. comparing a split-entry to a colonial).
• Pulling up competing homes currently listed that are overpriced or not moving.

Using incorrect listings for pricing will result in inaccurate pricing and usually overpricing.

Adjustments to Value

Another facet of pricing is making adjustments for differing amenities. It is difficult to come across two identical properties, so adjustments are generally applied for square footage, acreage, and features such as garages, bedrooms, fireplaces, condition, and upgrades. Sellers naturally use the price spent on upgrades. However, the resale value of different amenities rarely match the cost for them. In fact, certain features will not result in value to a property at all. Real estate agents are educated on what appraisers may calculate for differences in features and will apply those accordingly when compiling a market analysis on a home.

For Sale By Owner May Result In Overpricing By Charlotte Sellers

Incorrectly priced homes will cost homeowners valuable energy and money. Listings may remain on the market with no activity or with activity from buyers that are merely wondering why the price is so high. additionally, home buyers have a negative view on listings that are marketed for extended periods of time and are likely to offer less even if the price is later dropped. In a declining market, a listing can naturally drop in value by the time it actually sells. All of this leads a for sale by owner property to sell for much less than it could have with the experienced advice of a real estate broker. That loss can be higher than what a homeowner thought he or she was saving by trying it alone.