5 Ways You Could Be Pricing Your Inherited Property Incorrectly
As a real estate agent specializing in probate properties, I have seen many clients make common mistakes when it comes to pricing their inherited homes. Here are five common ways that people often misprice their homes, and why working with an experienced agent like myself can help you avoid these pitfalls.
- Overpricing the home based on emotional value. It can be hard to put a price tag on a home filled with memories, but emotional value does not always translate to market value. Overpricing a home can lead to it sitting on the market for a long time, resulting in lower offers and ultimately a lower sale price. Thanks to my experience, I have a deep understanding of the local market and can help you price the property accurately. By analyzing comparable properties in the area, assessing the condition of the property, and taking into account any necessary repairs or renovations, I can help you set a fair price that maximizes your return while still attracting potential buyers.
- Underpricing the home to sell quickly. While it may be tempting to price the home low to encourage a quick sale, it can lead to leaving money on the table. A skilled agent can help you determine a fair market value and develop a strategy to market the property effectively to attract the right buyers. We know home shoppers often set a maximum budget when they’re searching for available properties – but we often forget that many of them also set a minimum. This is to eliminate those properties that they might assume are likely in disarray, need too much work, or are in less desirable neighborhoods. I always weigh this against the value of your home when determining a price – it matters!
- Not taking into account the cost of repairs and updates. Inherited homes often need repairs and updates to make them more appealing to buyers. Not factoring in these costs can lead to an inaccurate price and a smaller pool of potential buyers. For example, a recent client of mine inherited a home from his parents that they had owned for over 50 years. The home was located in a desirable neighborhood, but it had not been updated since the 1970s. The kitchen and bathrooms were outdated, the walls were covered in old wallpaper, and the carpets were worn and stained. When he initially contacted me, he wanted to sell the home as-is, without making any updates or repairs. However, I explained to him that investing some money into updating the home could help attract more potential buyers and increase the final sale price. While he was hesitant to invest the money at first, he ultimately agreed to the updates. The total cost of the repairs and updates came to around $30,000, but the results were well worth it. The home was listed & sold for $100,000 more than it would have in its as-is condition, and within just a week of being listed.
- Not considering the tax implications of the sale. Selling a probate property can have significant tax implications, and failing to consider these can lead to costly mistakes. For example, if the property is sold for more than its original purchase price, there may be capital gains taxes owed. Additionally, the estate may owe estate taxes or inheritance taxes, depending on the state where the property is located. As your probate real estate agent, I can connect you with a qualified estate planning attorney who can help you navigate the tax implications of selling the property. It’s important to work with a professional who understands the complex laws surrounding probate real estate. I once worked with a family who inherited a property with a high tax basis. They were initially unsure of how to proceed to protect their financials and maximize profit. With the help of an experienced estate planning attorney, we were able to structure the sale in a way that minimized that tax liability and allowed them to achieve their financial goals.
- Using online calculators or valuations. While online calculators can provide a general idea of a home’s value, they are not always accurate. Every home is unique and requires a personalized approach to determine its market value.
Let’s say you’re trying to sell a probate property in a particular neighborhood that has a mix of homes that vary in age, size, and style. You may be tempted to use an online calculator to get an estimate of the property’s value based on the general area and recent sales in the neighborhood. However, this approach does not consider the unique features and characteristics of your specific property.
A skilled agent can easily recognize these distinctive features and use them to justify a higher valuation, and then develop a pricing strategy that maximizes your profit.
Pricing a probate property requires an experienced agent who understands the often complex challenges of selling inherited homes. As an agent who specializes in probate real estate, I have the knowledge and experience to accurately price your property, market it effectively, and get you the best possible price. Don’t leave money on the table – contact me today to learn more about how I can help you with your probate property sale!