The most common mistake is the sellers decide to test the waters by pricing their properties too high at the beginning. This is particularly true in a second home market where many sellers never really have to sell and most buyers never really have to buy. After a while on the market, the sellers begin to reduce their property until it eventually gets to a price that sells the property.
The good buyers are the buyers who are there at the time the property initially hits the market. Those buyers are motivated buyers and they are waiting for something new to be listed because they want to buy. If they reject the price, their first impression has been made and they discount the property. Most sellers think the buyer will return to the property after the price has been reduced. But in actuality, the buyer rarely will ever consider that over priced property again.
You have 100% control of your price, and you have the opportunity to make the best decision at the beginning, not during the middle of your marketing time or towards the end.
Every home has three prices: “Tax Assessment”, “Appraised Value”, and “True Market Value”.
1. Tax Assessment: May or may not have something to do with the value of your property. While your property is assessed annually and is based on assessing formulas, in Door County, I have found that the properties from 2009 through today, in most cases, are overvalued, and sellers are paying way too much in property taxes.
2. Appraised Value: If the buyer is not financing the purchase and paying cash, and is not requested an appraisal, this is not an issue. However, I've found most cash paying buyers want a current appraisal to make sure the value is there, and if there is financing involved, the lender will require one. If an Offer is received with an appraisal contingency and your property does not appraise out, the buyer may walk away from the deal. If the buyer elects not to walk away, but requests a new purchase price based on the appraised value, and you agree, you may be able to keep the deal together. From a buye'rs point of view, this is never a win situation and creates a bad taste in everyone’s mouth regardless of whether the transaction closes or not.
3. True Market Value: The uniqueness of Door County, particularly in Northern Door, usually means that there are not two houses which are the same. I cannot stress the importance of choosing and selecting a Seasoned REALTOR. After 30 years in this business, there is not too much I haven’t seen, and I have learned over these years that Door County real estate pricing is an art. There are many factors which aid an educated REALTOR to give the seller accurate advice on pricing their property at market value. Even then, the time on market is usually long, and the longer one spends on the market, the less you will receive in the long run.
You have 100 % control over your price. A smart seller will begin at #3 "True Market Value!
