Don’t Make This Home Selling Mistake

Hey, it’s me, Kati! Selling a home can be a complex process with numerous potential pitfalls. From pricing errors to hiring the wrong agent or presenting inadequate visuals, there are many mistakes that sellers can make. However, one critical mistake that often goes unnoticed is the failure to consider both the appraised value and the market value of the home. In this post, we will delve into the significance of these two numbers and how they affect the pricing strategy when selling a property.

The Importance of Price in Selling a Home

When it comes to selling a house, price is paramount. If a property is not attracting buyers, it almost always boils down to the price. While some may argue that other factors like a dated kitchen or an unfavorable location play a role, any objection can ultimately be overcome by adjusting the price. Let’s illustrate this with an example.

 Illustrating the Impact of Price on Buyer Interest

Imagine your kitchen needs remodeling, and you initially set the price slightly higher than it should be. As a result, potential buyers express hesitation or make lower offers. However, let’s consider an extreme scenario where you list your house for just one dollar. In this case, how many people would offer more than a dollar? The answer is all of them. While this example may seem peculiar, it underscores the importance of price in driving buyer interest.

Considering Appraised Value and Market Value

To determine the right price, sellers must consider both the appraised value and the market value of their home. The appraised value is the figure determined by an appraiser, usually based on the sale prices of comparable properties in the same neighborhood over the past three to six months. Appraisers typically focus on properties in close proximity and consider factors such as square footage, condition, and age.

Understanding the Difference Between Appraised Value and Market Value

However, it’s important to note that appraisers may not assign significant weight to location when comparing properties. On the other hand, market value represents the price buyers are willing to pay for a property. It takes into account all the aspects that appeal to buyers, including location, condition, and desirability. Market value is influenced by factors like recent sales in the area and buyer demand.

The Significance of Appraised Value and Market Value

Appraised value and market value are distinct numbers, and both hold importance in the pricing process. While the appraised value serves as a starting point for appraisers to determine the worth of a property, the market value represents the realistic price a buyer would pay. An appraised value that is higher than the market value may indicate a declining market, while a lower appraised value could suggest a rising market.

Collaborating with a Real Estate Agent

It’s crucial for sellers to work closely with their real estate agents, ensuring they understand the significance of these two values. An agent must not solely rely on the appraised value or the market value when pricing a home. Instead, they should consider both and strike a balance that attracts potential buyers while ensuring the property will appraise favorably.

Communicating and Assessing Accurate Home Values

Sellers should communicate with their agents to assess the appraised value and market value of their home accurately. By doing so, they can avoid overpricing, which leads to limited showings or lack of offers. Conversely, underpricing the property could result in missed opportunities for maximizing the selling price. Finding the right balance between these two values is essential to attract potential buyers, negotiate offers successfully, and ensure a smooth transaction process.

In conclusion, when selling your home, never underestimate the importance of considering both the appraised value and the market value. These two numbers provide valuable insights into the pricing strategy that will attract buyers and secure a favorable outcome. Remember, pricing is the key to unlocking interest and achieving a successful sale.