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November 22, 2021

Just how much do you think our house is really worth?

If you thought deciding to finally sell your home was a tough decision, wait until you try to decide what its really worth.

Should you set the price high, expecting prospective buyers will want to bargain you down before closing? Or do you start low to attract attention and get the inevitable discounting over with upfront?

Starting high with the idea that you can always drop it later can be a costly mistake since it can quickly take you out of the market. That's why, notwithstanding their interest in a quick sale, most realtors advise setting a fair price from the outset.  

And just how good a negotiator are you anyway?

Most of us have strong ties to our homes, and they invariably get in the way of the ultimate goal, which is to sell, says Marnie Bennett, a top-selling broker with Keller Williams VIP Realty in Ottawa.

Too often, sellers can unknowingly hinder their sale by making decisions based on emotion rather than logic, she maintains.

Economist Richard Thaler calls this the endowment effect, the tendency for things to become worth more in our eyes once we own them. And, for most people, their home is the biggest 'thing' they 'll ever own.

That's why it's important not take it personally when buyers present lowball offers. Remember, they're not insulting you; they're testing the waters.

Thanks to a stack of DIY homesale sites and shows like Property Brothers, potential buyers tend to offer much less when faced with a private sale since they think you’ve already banked 5% of the potential sale price in foregone commissions.

Some sellers, particularly when acting on their own, are so offended by low offers that they simply refuse to negotiate. That's likely a mistake as you’ll come out further ahead by firing back an appropriate counter-offer, Bennett suggets.

Here are her other suggestions to help detach yourself from your potential sale.

Whether acting on your own or through a realtor, have emotions got in the way of your real esate transactions? What turned things around?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...