Money Mistake #5 – Getting Stuck in the Past & Overpricing Your Home For Sale
(Money Magazine) — Remember what your home was worth in 2005? Wipe that number from your memory. When you let an old value — of a stock or a fund or your house — get in the way of a smart financial decision, what might seem like harmless nostalgia can become a costly mistake.
Investors have long suffered from this problem, refusing to sell underperforming stocks and funds in the hopes that the price will bounce back. Today home sellers are the ones having trouble letting go of the past.
June 2011 Money Magazine cover story is “Fix Your 5 Biggest Money Mistakes” and lists overpricing your home for sale as Money Mistake #5 and they are right.
Just as in the rest of life, you’ll be happier, richer, and live with more joy, if you focus on the present moment and leave the past in the past. The value of your home today is the value that a buyer today is willing to pay for it. Period. Bottom line. End of story.
How to know if you’ve overpriced your home.
If your house has been on the market for 3-4 weeks and has not sold (assuming that offers have not come in that you have refused), it is time to reduce the price…significantly. Usually, this means at least a 5% price reduction. If another month goes by & still no offers, it’s time to reduce it again. Unless your listing was totally mis-marketed (not on the MLS, not online, no public showings, no photos), the reason your home has not sold is almost always because the asking price is too high.