Overpricing your home is one of the best ways to get less money for it than if it had been priced correctly.
Read on for common reasons overpricing is a tempting, but bad strategy for success.
1. Maybe someone will pay my price
That’s a hopeful outlook, but overpricing will not attract buyers. While you’re waiting for your dream buyer to pay your dream price, your property is getting stale on the market and buyers lose interest or wonder what’s wrong with the home.
2. I want to leave room for negotiation
Unfortunately, buyers don’t tend to see it that way, rather they think the seller is unrealistic. Buyers may keep an eye on the property and wait until the seller drops the price. A buyer may write a reasonable offer, but the seller is likely to view it as a lowball offer or buyers will simply reject the property.
3. I need to get a certain amount of money out of the sale
The amount of money you want or need out of the sale has no relationship to the market value of the property. It’s tough to hear, but it’s true. One of the jobs of a good realtor is to tell you the truth.
4. My house is better than my neighbor’s because it has [fill in the blank]
Sometimes, upgrades, location, etc. are significant and may justify a higher price. Often, the differences are not enough to bring a higher price.
5. I don’t want to sell it too low
No one wants to leave money on the table, that’s for sure. If you price your property a bit below market value, the property may attract a lot of attention and generate multiple offers which may exceed the list price.
6. If no one else wants it, neither do I [unless I can get a killer deal]
When a home sits on the market for a long time, people tend to think that if no one else wants it, there must be something wrong with it or the seller is desperate. That’s when buyers come around offering really low numbers.
7. You may get a lot of showings and no offers
Realtors may show an overpriced property to a buyer to convince them that a different property is a good value. A realtor may also use your overpriced home as an example to a seller client that the overpricing strategy is ineffective.
8. You may get no showings or very few showings
The property is so overpriced, very few realtors will show it. The only time people see the property is at open house. Interested buyers will wait and watch for price reductions rather than offering, if they think there’s too much space between the list price and what they and their Realtor see as market value.
9. When the seller holds out for a lower price
You read that right. Sellers who list high often end up being on the market longer and getting a lower price than if they’d priced their property realistically from the start.
A good realtor will help you determine the right price at which to list your home for sale. There’s no perfect price, but you should be in a range where prospective buyers will not dismiss you. You want interested buyers to see the property so they have the chance to fall in love with it and buy it for a price that works for both of you.
If you need help properly pricing your property, please feel free to contact me and I will be happy to help you determine the market value.