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Seven Deadly Sins of Overpricing
Realtor: “Here are the active listings that you are competing with. There are 42 homes on the market in the price range between $150,000 -$200,000.”
Seller: “I was thinking of listing at $225,000. We can always come down.”
Ninety percent of getting a home sold in a reasonable time frame is pricing it right. Nothing else really matters. You can have your home mentioned in a million, trillion blogs and have your listing on 350 websites, but if it’s the wrong price in a buyer’s market it won’t sell, no matter how hard your realtor works.
Even if you do find a buyer willing to pay an inflated price for your home, the fact is over 90% of buyers use some kind of financing to pay for their home purchase. Lenders almost always require an appraisal be done. If your home won’t appraise for the contract purchase price, your sale will likely fail.
Buyers are sophisticated and well-educated. They have on-line access to every home for sale.If your home is overpriced, they won’t bother to look at it or make you an offer.
When a new listing hits the market, every agent quickly checks the property out to see if it’s a good fit for their buyer.If your home is branded as “overpriced,” reigniting interest may take drastic mark down measures.
You are helping your competition by overpricing your home.There’s nothing worse than making your neighbor’s house look like a good deal.Don’t watch the SOLD sign go up in their yard!
The longer your home sits on the market, the more likely it is to become stigmatized or stale.Have you ever seen a property that seems to be perpetually for sale?Do you find yourself wondering, “What’s wrong with that house?”
Buyers who view your home knowing it is overpriced may negotiate tougher because they know the home has been on the market for a longer period of time.
You will lose a percentage of buyers who are outside of your price point.These are buyers who are looking in the price range that the home will eventually sell for but don’t see the home because the price is above their pre-set budget.
You have four choices. 1) Keep your home and don’t sell it. 2) Keep your home and rent it out. 3) Walk away from your home and give it back to the bank. 4) Or price your home at today’s actual value, so you can sell.