Pricing your Home Correctly
Pricing your own home is hard, what with all the history and hopes this magic number entails. Of course, you want to make a profit. Of course, all that money you spent installing a swimming pool or a half-bath will be recouped, because you’re leaving your digs in better shape than when you bought it, right? Right?
Well, not necessarily. Too many home sellers fall prey to myths about home pricing that seem to make sense at first, but don’t jibe with the reality of real estate markets today. To make sure you haven’t bought into any of this malarkey—since the buyers you’re trying to woo sure haven’t—here are some common pricing myths you’ll want to rinse from your brain so you kick off your home-selling venture with realistic expectations. It’s time to get real, folks!
. You always make money when you sell a home
Sure, real estate tends to appreciate over time: The National Association of Realtors® estimates that home prices will jump 5% by the end of 2017 and continue rising 3.5% in 2018. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live.
The NAR also found, for instance, that the cost of single-family homes increased in about 87% of the metros it studied, but prices actually dropped in 23 markets. So don’t assume you’ll walk away with a profit until you’ve examined what’s up in your area first.
2. Price your house high to make big bucks
We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that an overpriced home just won’t sell.
“While the payday might sound appealing, you’re actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home,” says Kathleen Marks, a Realtor® with United Real Estate in Asheville, NC.
While certain buyers might be suckered in, this becomes far less likely if they’re working with a buyer’s agent who will know all too well when a home is overpriced, and advise their client to steer clear. And this can lead to problems down the road (as our next myth indicates).
3. If your home’s overpriced, it’s no big deal to lower it later
Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months—or that have undergone one or more price reductions—make buyers presume that something must be wrong with it. As such, they might still steer clear, or offer even less than the price you’re now asking.
Bottom line: “Price your home appropriately from the beginning for your best shot at having a quick and easy sale,” Marks recommends.
4. Pricing your home low means you won’t make as much money
Similarly, sellers are often leery of pricing their home on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your home’s price past your wildest dreams.
5. You can add the cost of any renovations you’ve made
Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home’s new owners are inheriting all your hard work.
The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements. Plus that profit can vary greatly based on which renovation you do.
Check out this list of common renovations and their return on investmentto know what you can actually expect.
6. A past appraisal will help you pinpoint the right price
If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It’s not!
An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old.
“Since lenders know markets can change in six months’ time, it’s important for sellers to understand that a previous appraisal is never a reliable source for the current value of a home,” Marks says.
7. Your agent might overprice the house to make a bigger commission
Don’t even go there, says Realtor Raena Janes of RJHomes in Tucson, AZ.
“While it’s true that an agent’s commission is based on the selling price of a house, the disparity will end up being negligible,” she says. For example, the difference in commission between a $300,000 house and one that’s $310,000 is about $150.
“No real estate agent is going to lose a sale for the sake of a couple hundred dollars,” she explains.
10 Things that Make Sundown Lake Unique
- Private Lake– Most Midwest states have laws that require lakes to be open or have an access point for the public to use and access it from. Sundown Lake is unique in that all of the land that surrounds the lake’s shoreline is 100% private that allows the lake to limit the number of people who have access to the lake and makes this one special place for those who can afford to live here.
- Private Roads– Because the lake is private when the lake was successfully developed by Secluded Land Company in 2005-2016 many of the interior roads were built to town/county specifications but they are private meaning that the Sundown Lake Home Owners have a responsibility to maintain each road on the interior of the development.
- Building- There are protective covenants in place to protect the integrity of the development. It is important to obtain a copy of the current covenants to make sure that you have a firm understanding of the requirements for building at Sundown Lake. There is no timeline as to when you are required to build on a lot, but once you decide what you would like to build it has to meet the minimum standards of the development and gain approval.
- Camping- Sundown Lake allows long and short term camping but doesn’t allow you to leave a camper on your property unattended for more than 48 hours. So camp for as many days as you wish as long as you attend the camper within that time limit. Take the camper with you or store it locally there are options.
- Hunting– on your own private property their are no special rules or restrictions outside of the Iowa State and DNR that prevent or prohibit hunting your private land.
- Fishing- Because Sundown Lake is private the Home Owners have the ability to set rules and administer stocking plans to help make Sundown Lake a great fishery for all owners.
- Boating- Only two motorized boats are allowed per lot at Sundown Lake. All motorized watercraft must have sticker and be registered with the Home Owners Association to be allowed on the lake.
- Surveyed Lots- When Secluded Land Company initially sold lots starting in 2005 all of the properties surrounding the lake were surveyed prior to being conveyed by them to new owners. These survey maps provide a great reference for all current and future lot owners to determine exactly where property lines are located. A professional surveyor should easily be able to help relocate any original monuments.
- Size of the Development – The entire Sundown Lake area is comprised of over 2,800 acres with over 400 acres submerged as the lake. The remaining acreage (2400 acres) is divided into roughly 350 buildable lots.
- Wildlife– Whether you are a hunter, fisherperson, birdwatcher, or just love seeing wildlife in a natural state Sundown Lake a unique environment for everyone. From Whitetail deer to Wild Turkey Bald Eagles to Pelicans Sundown has a unique experience to offer nearly everyday.
Sundown Lake Dredging Project
Sundown Lake Property Owners working in conjunction with the Rural Improvement Zone Board to dredge a bay at Sundown Lake. The board is working on other projects to help improve other areas in the near future.
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