Listing Your Home for Too Much Can Have Damaging Results
When selling their home, many homeowners price their property above the market value for a variety of reasons. Some hope they’ll get lucky and find a buyer who loves their home enough to pay the inflated price. Others believe leaving a lot of room for negotiation will net them a higher price. And quite often, some set the price based on financial need rather than reality.
Unfortunately, an overpriced home is easy to spot. Buyers are savvy researchers, and if represented well by their real estate agents, they won’t be duped on price. Overpricing can result in a longer time on the market with no sale or a drastically lower price than what the home could have received. Take a look at these damaging effects in detail.
Buyers won’t even bother looking
Buyers and Realtors® use price ranges to search for homes online. If a buyer’s cap price is $245,000, they might enter $200,000 to $250,000 in their search to leave some negotiation room.
If the market value of your home is $250,000 and you’ve priced it at $275,000, this buyer won’t even see your home in their search results. And buyers searching in the $250,000 to $300,000 range will notice that homes correctly priced in this range have more to offer in size, upgrades, type of neighborhood and other features than yours does if you’re overpriced by about 10%.
So if they can get more for their money in other homes, they’re less likely to give yours a chance.
Time on the Market Will Give Your Home a Bad Reputation
Time is not your friend when you are selling a home. Buyers want to see the freshest listings on the market because they know the best homes go fast. An overpriced home sits on the market for months or longer, and attracts fewer showings. Eventually, you’ll drop your price several times to find a point where someone will make an offer. Many months on the market can make your home seem stale or unwanted. People often ask, “What’s wrong with that house?”
It Will End Up Selling for Less
If you price your house too high, buyers will undervalue your property. If you wait too long to adjust the price down, buyers will become reluctant to pay that price. They’ll assume you’re desperate to sell and you’ll receive low-ball offers.
Price it Right the First Time…or Correct Quickly
Realtors® have seen it happen time and time again. Overpricing hurts the final sale of a home. Heed the warnings. If you price your home right from the start, it will sell faster and for more money, whether it’s in the low $600,000s or the high $900,000s. If by chance you overprice your home at the start, drop the price within a few weeks of being on the market so that you can garner a faster and higher sale than waiting a long time before dropping the price.
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