Don't Make This MISTAKE When Trying to Sell Your Home!

Don't Make This MISTAKE When Trying to Sell Your Home!

Hey El Paso, thanks for checking out the YouTube channel. My name is John Peña with Peña El Paso Realty Group. If you're looking to buy or sell a home, please consider reaching out to us. If you like this type of information, please consider subscribing to the channel.

And speaking of selling your home, let's talk about something pretty quickly here that I see happening a lot, and it's a big mistake, and that is essentially overpricing your home. If you are looking to sell your home, now is not the time to overprice your home, and I'm going to tell you exactly why.

So first off, why would somebody overprice their home? Number one, maybe they think that the real estate market is like it was 2021-2022. It is not. It's essentially in many ways the exact opposite of what it was then, okay?

Number two, maybe a snaky real estate agent convinces you that your home is worth way more than it is just to get your business. Number three, maybe you think your home is somehow special, unique, amazing, different than everyone else's, and honestly, chances are it's not.

Number four, maybe you made some pretty significant improvements, spent a lot of money on your house, and you think that somehow you're going to magically get all of that money back. You are not. So let me give you five quick reasons why now is absolutely the worst time to overprice

your home. Number one, inflation. Basically now everything's overpriced, right? That's what inflation means, is that everything, goods and services, cost more money.

So now buyers' wallets are stretched because they're paying more for food, they're paying more for travel, for cars. The last thing they want to do is pay more than what a home is actually worth. Number two, interest rates are high and climbing, right?

If you bought a $250,000 house and basically put 5% down, if you had a 3% interest rate, your monthly mortgage payment would be just under $1,500. At 7% interest rate, your mortgage just climbed to just over $2,000. So it's a difference of 25%.

So 3% versus 7% makes a pretty drastic difference, right? Number three, property taxes are higher than they've ever been. So now not only are buyers having to pay a lot more in interest, they're also having to pay a lot more in property taxes.

Number four, buyers have a lot more choices because while there still isn't enough inventory, we could say, there's still more inventory than there was a couple of years ago because homes are staying on the market longer. Number five, there are simply less buyers in the market.

A lot of buyers have been priced out of the market. A lot of military buyers, which we would typically get, are probably standing off to the sideline and deciding to use that housing allowance just to rent a house or maybe stay on base. So as you can see from this graph, year over year, this year versus this time last year,

the number of closed sales is down 23%, okay? So simply, less homes are selling right now. So if there's any good news, it's that essentially home prices have continued to climb. And you can see though from this blue line that it's starting to come down for the first

time in a long time. It's still positive growth, but we're starting to trend down. It's possible that if the economy doesn't turn around and if there's a bank crisis of any sort, we're going to see that blue line dip down below that zero.

And then sure enough, home prices are actually going to start to come down. So here's the bottom line. If you're going to sell your home, you have to remember, buyers determine fair market value, not you.

Just because you want to get X amount of money for your home doesn't make it so, okay? Again, sometimes people rely on this estimate. You should be very, very careful about this estimate. But you have to remember, buyers determine market value, not you.

Just because you want $50,000 more than what your home's actually worth certainly doesn't mean that that's what you're going to get. The other thing that you have to remember is that buyers aren't going to overpay for a home.

They're simply not. They're going to look for another home that's similar, that's more reasonably priced, or they're simply going to just stand back on the sidelines and rent for a while, okay? Another thing to think about is you have to, now I know that real estate agents have a

bad rap, but that's what we're, professional real estate agents, we get paid to tell you what your home is worth. If you don't listen to your professional real estate agent, then you're most likely doing yourself a big disservice.

Now, again, absolutely not the time to overprice your home. If you have to sell your home, no problem, because if you price it fairly, it's going to sell. Homes that are priced reasonably are still selling in plenty of time.

Homes that are overpriced are not selling, okay? It's a really important thing to think about. Just to drive this point home, let me give you a couple of stories. First off, there's a home in Sunset Heights, and essentially, this home has been overpriced

by about $100,000 to $125,000, okay? Now, what happens with this home? It goes on the market, it's overpriced, within a week, I think they had dropped maybe $40,000, and I think the price is still coming down.

If that's the strategy that you're going to take, you're going to price it super, super high, and then just drop it, drop it, drop it, that's a poor strategy, because a lot of buyers are going to see, oh, price reduction, what's wrong with it, right? It makes you look ... I mean, let's be honest.

Buyers aren't stupid. They can realize like, oh man, this person was really unrealistic about what they wanted for the home, and now they're dropping the price. It turns a lot of buyers off, in my opinion, rightly so.

I've got another story about a home in Enchanted Hills. Most of the homes in Enchanted Hills, $350,000 to $500,000. We had a person reach out to us, and they basically made a lot of really nice upgrades, put in a pool, and a lot of really fancy features, and they wanted to sell the home for over

$600,000. We said, no, we're not going to list the home, we're not going to spend our money on pictures, videos, marketing on a home that is unrealistically priced. Somebody else took that listing, guess what?

It sat on the market forever, and the listing expired. One more story. We recently had somebody reach out to us. I actually went to this home to look at the home in person to get an idea of what it would

sell for. My ballpark was $350,000. Also, how do we determine what a home is going to sell for? We look at the homes that are similar in size, features, and location, and then we make a

decision based off of those, what we call comps, or comparable properties. My estimation of price was $350,000. When I asked this seller what they expected to get for the home, $600,000. This is a very unrealistic philosophy to take.

You can't overprice your home. Just because you think that your home is worth X, unless you're a qualified real estate agent or appraiser, you really need to leave the pricing of your home to a professional. Main point of the story, don't overprice your home.

If you have to sell your home, awesome, no problem. Price it reasonably, and it's going to sell. I hope that that is somewhat useful. It's not the most happy topic that we have to talk about sometimes, but I think it's

a really important topic for homeowners to hear. Hopefully, you're not finding yourself in that position. To make sure that you don't end up in that position, please consider reaching out to us here.

With that, we'll see you in the next episode.