5 Mistakes When Pricing Jacksonville Real Estate for Sale
Are there really six massive mistakes sellers make when pricing Jacksonville Real Estate for Sale? According to Joseph Rand at INMAN there are, and if you make one of these your house could languish for months.
Pricing to the unsolds, rather than the solds – this one made me chuckle. It seems so obvious. We see the homes go up for sale in our neighborhoods. The first thing we do is check the size of the house compared to ours, compare amenities, bells and whistles. Wow, they are asking $475,000 for that house. That means my house is worth at least $475,000. So when we think of selling we immediately want to list at $475,000 or more.
Overvaluing the amenities – Another mistake sellers make is that they put too much faith in the value of unique amenities — granite counters, bathroom finishes, high-end appliances and so on. If granite counters are what buyers want, they are unlikely to pay more for yours. Instead they will lower the offering price of houses without granite counters. I once bought a house with a wooden hot tub. I’m sure they thought it should sell for more with the hot tub. But after two winters when I had to re-plumb the pipes because they froze and cracked when the heater went out, I ended up having it hauled away.
Trying to get full value for improvements – Not only do many sellers overvalue their amenities, they particularly overvalue any improvements they made in the home. Many improvements don’t return 100% of value. You would be lucky to get 85% unless you put in a new metal door, or remodel kitchen. A new roof is just a maintenance thing.
Pricing based on what the sellers ‘need’ – I once talked with some homeowners about buying their house for cash. I asked what they were looking for as a price. They said they “needed” $200,000 net after paying off the mortgages. I couldn’t make it pencil out. They put the house up for sale at the price they needed, and it sat for a long time in a hot market because they were asking too much.
Falling in love with the AVM – Finally, sellers make the mistake of relying too much on a Zestimate. And it’s not just the Zestimate. Automated valuation models, or AVMs, are available everywhere now, including on a lot of broker websites. They can be fun when researching values in your neighborhood, but, Zillow itself admits to a national median error rate of about 8 percent, which means that many of the Zestimates are off by more than 8 percent. So for homes with Zestimates of, say, $400,000, many are going to sell inside a range of about $368,000 to $432,000. Others could sell either higher or lower than that range.
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