I’m not a fan of writing about the obvious…but I’m seeing home prices in the Des Moines Real Estate market that are raising a red flag in my head. You’ve heard it before. There are dangers to overpricing your home. You know this, right?

Let me just back up and say, “I get it.” I know you paid X dollars for your home. I know you put in that dream kitchen and your location is better than your neighbor. I know that you don’t have to move. I know that the assessor’s site says your home is worth $X. I know that Zillow has you priced here. I get that.

But let me tell you. It doesn’t matter. The market matters.

Do you get value for your improvements? Absolutely. Do you get value for your location? Absolutely. But let’s remember that when we’re talking about real estate…appreciation is NOT automatic. While real estate is a great investment, your return will depend on the current market.

The MARKET sets your price. Not me. Not you.

How do I price my home?

Your real estate professional needs to complete a market analysis for your home. Using recent sales ( I try my best to use 90 days back. Up to 6 months back if I have to). After analyzing, put yourself in a buyer’s shoes. Look at active homes and see where your home fits. Ask around to family and friends for their opinion.

Your home MUST appraise. Unless your buyer is walking in with cash, their lender will require an appraisal. In my opinion, you need to have 3 homes in your area that are currently PENDING or SOLD to compare to. Again…within the last 90 days. These homes must be similar to your home in size, style, and finish. If you don’t have that…you’re too high. (Appraisers/Lenders…weigh in here).

WHY is price is so important?

Missed opportunities, that’s why. If your home is overpriced, it will likely not reach your buyer. Suppose 80% of buyers are starting their home search online. If your home is overpriced, they are missing your home.

Don’t CHASE the market down?

Have you ever seen “that home” in your neighborhood? It’s been on the market forever. It’s cute. Great location…but what’s wrong? Likely nothing…but they may have priced their home too high to start. If you don’t make the adjustment soon enough, you will become “that home”. You don’t want that.

On Twitter, @clairecelsi asked me:

“Don’t you think people price their homes to try to cover their investment or perceived investment?”

My answer is yes. Not always the case, but a good example. People have the most amazing reasons for pricing their homes. I should follow this post with a post on Cost VS. Value of remodeling projects in the Midwest. Without getting too in depth, I’ll say that your return is not dollar for dollar.

BUT…”they” say this…

Other reasons people overprice?

Attachment to their home
Current competing homes in the area for sale that are overpriced
Misinformation from real estate websites
Home is assessed too high (you can fight this!!)
Overpaid for their home
Need a certain amount for downpayment
I just want to see if I can get this price…

The list goes on and on….what I want you to take away is that you’re missing opportunities. Price is probably THE most important part of your marketing, and if that’s off, you can expect to sit for awhile.

Bottom line…do your homework. I promise it will pay off in the long run!

Have more questions about Des Moines? There are definitely more answers.

Feel free to connect with me via Facebook, Twitter, Text, Email, or by cell. I’m happy to help.