Overpricing Can Be the Worst Strategy When Selling a Home

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We’ve all seen them – homes that are on the market and priced so high you have to wonder if the sellers are setting their asking price based on home values from another decade. But if you think about it – the goal of these people is to end up with more money in their pocket at the end of the day.  The truth is that when sellers price their home for more than what the market dictates it is worth, there are some pretty dire circumstances.  Here are three reasons why you should shy away from pricing your home too high, and make a concerted effort to price it effectively.

Buyers Don’t Like to Deviate Too Much From the Asking Price

Whether because of perceived rigidness on the part of the sellers, or to save themselves the embarrassment of their offer being rejected, many buyers shy away from bidding on homes that are overpriced.  They have no idea why the seller may have priced the property so high, and the last thing buyers want to do is waste time in a bidding tug of war only to be the loser at the end of the day – so they don’t make an offer.

There is a Misconception That Sellers Know Their Home is Overpriced

Many buyers mistakenly believe that the seller knows their home is overpriced. The buyers think that if the seller is willing to accept a lower value that they would just price the home accordingly in the first place. to accept a lower value then they just priced the home accordingly.  An overpriced listing is a turn off to serious buyers. So rather than mess with it, they move on to other properties, and an offer fopr the overpriced home never makes it to the table.

Buyers Assume That Previous Offers Have Been Rejected By The Seller

A home that is priced higher than it should be gives the impression that the seller is not willing to budge.  Buyers take one look at such properties and assume that previous offers were probably made based on the property’s fair market value and the seller refused to negotiate.  In actuality, these homes almost never receive offers, leaving the seller in the dark and the buyers to move on to other properties.
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The single biggest financial disadvantage of listing a home too high is that it won’t sell and the seller will either have to channel more money into the home to get some offers on the table or they will have to reduce the price to get it sold.  The interesting thing is that the reduced price is often lower than what would have been the asking price had the home been priced effectively in the first place.

Homeowners that end up pricing their home too high usually spend thousands of dollars more than they were trying to save in the first place.  By practicing our tips and remaining aware of the reasons why overpricing is the worst thing you can do, you can sell your home for a great price instead of being one of the last houses on the block yet to sell.  To learn more about great pricing strategies visit your Realtor to get customized, professional consultation.  Nothing beats working with someone that knows the industry well!

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TIPS ON HOW TO PRICE A HOME  

* Do your homework to find the current home value of your home.  A Comparative Market Analysis (CMA) is best done by a professional Realtor. You can also get an appraisal done – something that will help in the lending process plus justify your asking price)

* Give your home the TLC it needs so it is an attractive catch to potential buyers.  That’s a great way to justify your price.  If you can’t get to the items that need fixing or you would rather leave the aesthetics to your buyers’ so they can cater to their own tastes once they move in, be sure to reflect that in your price.

* Don’t get caught up in old prices that are no longer relevant in today’s buyer’s market.  Price your home based on today’s statistics and be prepared to corroborate the figure with current market data that supports your number.