You may feel that overpricing your home will bring you an offer more in line with what you are looking for, but it may actually hurt you in the long run. Overpricing your home is one of the worst real estate mistakes you can ever make. This is because buyers are the ones who actually determine the market value of any home, as they’re the ones having to pay for it.
Asking for an unrealistic price will cause your home to sit on the market and that only works against you. The majority of qualified buyers and real estate agents will only take interest in your home within 30 days of its listing date. This month is crucial to the success of your sale.
If you overprice your home by as little as 5% of the value, interest in your property will drop significantly within that first month. Real estate agents who see it upon listing will automatically consider it “overpriced” and inform any interested clients.
Realtors do this because they want to sell homes, not deal with overpriced real estate. It’s their job to show their clients fairly priced homes, so they have absolutely no motivation to pass along your home’s information.
Even if you happen to find a qualified buyer willing to pay that much money for your home, the property’s appraisal will fall short of the inflated asking price. This means that the financing of your potential buyer will crumble.
Overpricing your home only helps your competition. Those fairly priced, higher value homes suddenly look better to buyers shopping in your inflated price range. Why should they pay the same amount for your home when it falls short compared to better homes in the neighborhood?
An overpriced home will sit on the market for months, even years and this makes buyers wonder what’s wrong with it. The home may be in perfectly good shape, but the length of time on the market will kill its potential.
While you may overprice your home thinking you will get higher offers, the longer your home sits on the market, the more likely you will receive low offers, if any at all. This could mean that you lose money in the deal because you become so desperate to sell.
This doesn’t mean you have to start out listing it at below its value. Determine the fair market value when stacked up against comps in the neighborhood and simply list it fairly.
You can determine the home’s value based on realtors’ market research and by visiting other houses on the market in your area. You also want to remain objective in coming to a price buyers will accept. This means not charging extra for all those years of built-up memories.
A fair listing will maximize the percentage of qualified buyers who will view your home with serious interest. Setting the price too high will only alienate them. Make a splash on the market from day one by listing your home fairly. You’ll get a good response from real estate agents and potential buyers and are less likely to deal with prolonged months of stagnation.