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Top Four Most Common Pricing Mistakes
At Robinson Realty & Management we always strive to provide our owners with the best possible direction in terms of pricing. When it comes down to it, the final decision always belongs to the owner. In addition to pricing relative to the comparable homes in the neighborhood there are a few other strategies that come into play that could be the determining factor behind finding a tenant quickly and having a property sit on the market vacant.
Pricing too high from the start
Statistics show that homes priced correctly when they first hit the market will lease closer to the asking price than homes that start too high, then have to adjust downward. We see this often with homeowners who are moving out of the home they lived in and then trying to rent it out. Don’t let sentiment get in the way of pricing your home correctly! The longer a home spends on the market, the more potential tenants will try to negotiate a lower price. The thinking goes; if the home has been on the market for a long time with 3-4 price reductions, they must be getting desperate – so let’s see if we can get away with offering less. Don’t out price yourself!
Using an odd list price, like $1864/month
Quick fix: use round numbers. Realtors typically search for homes based on price categories. In leasing, we generally tell people to make jumps in increments of $25 (i.e. $1,800 - $1,825 - $1,850 – etc). That way when an agent searches based on their client’s price range, your property won’t be left out of the mix because of a random list price.
Not basing your price on sold/leased homes
When looking at comparable homes in the neighborhood of a subject property, searching actual “LEASED” properties is the only true pricing guide. A home can be put on the market with any price tag – that doesn’t mean the home will ever lease for that much. Be aware of timing! When looking at other homes in the neighborhood, be sure to take into account when they leased. You are much more likely to get top dollar for a house with a pool if you are putting it on the market in the spring than if you are putting it on the market in the middle of winter.
Refusing to negotiate
This is the biggest mistake owners can make when they are trying to lease a property out. Your asking price should have some built in flexibility (meaning if you hope to end up getting $1,500/mo in rent, your asking price should probably be higher; $1,525 - $1,575). Not being flexible with your list price is something that is bound to turn away serious potential tenants. Even if they are only getting $25 off the list price ($300 over the course of a year), people want to feel like they’ve found the best deal possible for themselves and not start a new lease with doubts as to whether they are paying too much.
Interested in knowing what your home is worth? Give us a call and we will send you a comprehensive market analysis for your home!
