How does a potential buyer determine what your home is worth? Here’s the main perspective that buyers use to analyze a home’s value: emotion.
Emotions are powerful and they’re the driving force behind most of our decisions, especially, major decisions. It’s a hidden part of the process because it’s often being used without the buyer even realizing it. On top of that, they typically aren’t able to control their emotions either. But the good news is that you can control their emotions. Yep. You’re in the driver’s seat in this area. It’s revolved around how you make them feel.
Do they feel your home is overpriced? Do they feel like they’re getting a fair deal? Do they feel like you’re a reasonable seller? Believe it or not, how you make the buyer feel is the most powerful decision-making emotion that you can control whether it’s positive or negative.
This doesn’t mean that all buyers are completely illogical and running wild with emotions. You’ll still have situations that involve logical reasoning. It’s not 100% emotional. I just want you to be aware that by controlling their emotions (making them fall in love with your home) you’ll put yourself in the best position to pocket the most equity.
Let’s look at the condition of your home, its “reputation,” and listing your home at a reasonable price and apply this concept to those areas.
The condition of your home. This is where the buyer looks through your home with “judging eyes,” makes mental notes of everything they see and subconsciously use it to help them with their offer. A dirty house that needs deep cleaning; filthy or old appliances; too much clutter everywhere; worn out or stained carpet; and walls that need touch up painting, etc. all dictate the home’s condition and strongly influences the buyer’s offer. Logically, you may argue that they can look past the clutter and dirty house and that it just needs to be cleaned. But, emotionally it makes the buyer feel like you didn’t take good care of your home.
The history (reputation) of your home. The local MLS keeps an archived record of all the times your home has been listed and re-listed; your price reductions; whether or not you’ve ever been under contract with another buyer; etc. This matters because if they see a long history of days on market and going in and out of contract with buyers, they get the feeling that something is either wrong with the home or you’re an unreasonable seller. It can spook them.
The list price. Overpricing your home can cost you big-time! Some sellers won’t accept the fact that buyers aren’t going to overpay you for your property and they won’t make logical offers in these situations. They’ll make low-ball offers because they don’t know how else to handle it. You’ll lose money if you aren’t careful here.