The Number One Mistake Sellers Are Making: Overpricing Their House

In today's housing market, many sellers are making a critical mistake: overpricing their houses. This common error can lead to a home sitting on the market for a long time without any offers. And when that happens, the homeowner may have to drop their asking price to try to re-ignite buyer interest.Data from Realtor.com shows the number of homeowners realizing this mistake and doing a price reduction is climbing (see graph below):If you’re thinking about making a move yourself, here’s what you need to know. The best way to avoid making a costly mistake is to work with a trusted real estate agent to find the right price. Here’s a look at what’s at stake if you don’t.Not Paying Attention To Current Market ConditionsUnderstanding current market conditions is key to accurate pricing. You don’t want to set your asking price based on what happened during the pandemic. The market has moderated a lot since then, so it’s far better to align your price with today’s reality.Real estate agents stay updated on market trends and how they impact the pricing strategy for your house.Pricing It Based on What You Want To Make (Not What It’s Worth)Another misstep is pricing it based on what you want to make on the sale, and not necessarily current market value. You may see other homes in your neighborhood selling for top dollar and assume yours can do the same. But you may not be considering differences in size, condition, and features. For example, maybe that other house is waterfront or has a finished basement. To sum it up, Bankrate explains:“How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.”An agent will do a comparative market analysis (CMA) to make sure your house is compared with truly similar properties to get an accurate look at how it should be priced.Pricing High to Leave Room for NegotiationAnother common, yet misguided strategy is to price your house high on purpose, so you have more room to negotiate down during the sale. But this can backfire. A price that seems too high often deters potential buyers from even considering the home. So rather than leaving room for negotiation, what you’ll actually be doing is turning buyers away. U.S. News Real Estate explains:“You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you've overpriced your home, chances are you'll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.”An agent can help you set a fair price that attracts buyers and encourages more competitive offers.Bottom LineOverpricing your home can have serious consequences. A knowledgeable real estate agent brings an objective perspective, in-depth market knowledge, and a strategic approach to pricing.Connect with a local real estate professional to avoid making a pricing mistake that’ll cost you.

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How To Choose a Great Local Real Estate Agent

Selecting the right real estate agent can make a world of difference when buying or selling a home. But how do you find the best one? Here are some tips to help you make that big decision as you determine your partner in the process.Check Their ReputationStart by gathering information about agents in your area. From there, try to narrow down the list. Ask the people you trust if they have someone they’d recommend. You’ll want to find an agent with a strong online presence, plenty of positive reviews, and someone whose great reputation truly precedes them. As Freddie Mac explains:“. . . you may want to look for a real estate agent who specializes in the type of home you’re searching for. For example, if you are looking for an energy-efficient home, look for an agent who has experience with finding and negotiating offers for those homes. If you are looking for new construction, you’ll want to find an agent who has experience with new construction and isn’t affiliated with the builder . . .”Look for Local Market ExpertiseA great agent should have in-depth knowledge of what’s happening at the national and local level. That way they can clear up any misconceptions sparked by what you’re reading or hearing in the news. And they can tell you how your area compares to the national data. As an added perk, they’ll also be familiar with the neighborhoods you’re interested in and community amenities. As a recent article from Business Insider says:“Spend some time talking with prospective agents about the local real estate market and how it could impact your purchase or sale. You want to get an understanding of how knowledgeable they are about local market conditions. Whether they're helping you sell or buy, their strategy for you should account for those conditions.”Get a Feel for Their Communication Style and AvailabilityEffective communication is key in real estate transactions. Choose an agent who listens to your needs, answers your questions quickly, and keeps you informed throughout the process. If an agent is juggling too many clients, they might not be able to give you the attention you deserve. You want someone who will be readily available and responsive. So, what’s the best way to get a feel for their communication style and preferences? Bankrate offers this advice:“Interviews also give you a chance to find out the agent’s preferred method of communication and their availability. For example, if you’re most comfortable texting and expect to visit homes after work hours during the week, you’ll want an agent who’s happy to do the same.”Trust Your GutLast, rely on your instincts. If you feel like you do or don’t click with one of the agents you’re talking to, that matters. Choose an agent you feel at ease with and who inspires confidence. The right agent should be someone you trust to guide you through one of the most significant transactions of your life. As Business Insider says:“As long as you've properly vetted the agents you're considering and ensured they have the necessary expertise, it's ok to go with your gut . . . Maybe you have a better rapport with one of the agents you're considering, or you just feel like they're easier to approach. You're going to be working closely with this person, so it's important to choose an agent you're comfortable with.”Bottom LineBy following these tips, you can pick an agent who’ll provide the support and expertise you need to help make the process as smooth as possible. Connect with local agents to see if they’d be a good fit for working together.

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How Mortgage Rate Changes Impact Your Homebuying Power

If you’re thinking about buying or selling a home, you’ve probably got mortgage rates on your mind. That’s because you’ve likely heard that mortgage rates impact how much you can afford in your monthly mortgage payment, and you want to factor that into your planning. Here’s what you need to know.What’s Happening with Mortgage Rates?Mortgage rates have been trending down recently. While that’s good news for your homebuying plans, it’s important to know that rates can be unpredictable because they’re affected by many factors. Things like the economy, job market, inflation, and decisions made by the Federal Reserve all play a part. So, even as rates go down, they can still bounce around a bit based on new economic data. As Odeta Kushi, Deputy Chief Economist at First American, says:“The ongoing deceleration in inflation, coupled with the Federal Reserve’s recent indication of potential rate cuts [in 2024], suggests an environment supportive of modest declines in mortgage rates. Barring any unforeseen circumstances and resurgence in inflation, lower mortgage rates could be on the horizon, but the journey towards them might be slow and bumpy.”How Do These Changes Affect You?When mortgage rates change, it affects how much you pay each month for your home loan. Even a small rate change can make a big difference to your monthly bill.Take a look at the chart below to see how different mortgage rates impact your house payment each month for various loan amounts. Imagine you can afford a monthly payment of $2,600 for your home loan. The green part in the chart shows payments in that range or lower based on varying mortgage rates (see chart below):Understanding how mortgage rates impact your payment helps you make better decisions. How Can You Keep Track of the Latest on Rates?Real estate agents have the expertise to help you understand what’s happening and what it means for you. They can provide tools and visuals, like the chart above, to show how rate changes impact your buying power.You don’t need to be a mortgage expert; you just need a professional by your side. Someone who can help you make sense of the market and guide you through your homebuying or selling journey.Bottom LineIf you have questions about the housing market, reach out to a local real estate agent. They can help you understand what’s going on and how to navigate it.

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