How Overpricing Your Home may Hurt You

The art of pricing a home for sale is one of the biggest parts of being in the real estate market. Each home has a true value, and if you want top dollar, finding the sweet spot is what you will have to do. The true value of a home is determined by what that specific potential buyer is willing to pay for it.

If you can price it closest to what you think someone will pay for it at the beginning, you have a better chance of getting top dollar. If you overprice it and it sits on the market for a while, you’ll probably be kicking yourself when you are forced to drop the price a time or two.

Do yourself a favor learn how to price your home correctly.

Price – buyer vs. seller

Sellers probably don’t have much perspective on the market and develop unreal expectations. They are only worried about their house, limiting their view.

Good agents live and breathe the market every day. They are well in tune with what’s going on because they’re the ones showing and touring homes, gaining an understanding of what drives home sales.

A lot of sellers overvalue their homes because they have that emotional attachment price tag tacked on too. Their home is only special to them, and no one else. It’s not uncommon for sellers to believe the agent’s price doesn’t match their own because they want a quick sale; and the friction begins.

Most good agents know what a home can truly sell for, because quality homes that show well sell in good days and bad.

First impressions last

Markets respond to new listings within a couple weeks, so it’s your job to make it attractive to potential buyers from the start. Your best bet is to follow exactly as your agent says, declutter, clean, painting, and staging in order to gain the advantage.

If you list at the wrong price you can leave a bad first impression for the market. Your home could lose momentum and never be able to recover. The longer it sits on the market, the less interesting it is.

Dropping price

You’ll be forced to drop your price if the home sits for too long and has little activity. If it’s mispriced by at least 5% (from the buyer’s perspective) your agent will ask you to drop your asking price. If you happen to still misprice it, and need to come down a second time, buyers won’t take your home seriously and you’ll take a big hit.

Once you figure out the right price, the buyers will come. As they come so do their lowball offers. Not pricing your home right from the beginning will literally cost you because you’ve lost your momentum.

Risk the market changing

You could get hit again by watching the market decline over time. Spring could be a healthy time for the market, but the fall could be a different story. Inventory will be plentiful, and the economy slows, interest rates rise, or any other factor could come into play.

By pricing too high, you risk the chance of sitting on a fluctuating market that could cost you money.

Risk poor showings

The longer your home sits on the market, the more likely you are to fall back into your ways and replace all the clutter you recently eliminated. The house gets dirty again and buyers notice. Your showing this go-around sucked compared to when it first hit the market.

A dirty house that is asking for top dollar will never get what they want. Buyers will notice a dirty house and assume you don’t take care of it insinuating there could be more problems. Once this happens they will offer a substantially lower deal than you planned.  

Advice

If you really want to sell your home, you better get serious about it. Have a game plan and don’t lose your motivation.

If your agent doesn’t think you can get what you are asking for, it’s best to follow their advice and use their recommendations.

Markets respond and treat sellers who are serious about selling well. 

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