Some sellers believe they should leave room to negotiate when pricing their home. A seller should avoid doing this and price their home in line to the local market. A real estate agent, like myself, can provide factual market data on what a home will sell for in your market. Let’s review some of the problems with overpricing a home.
- No Showings – Buyers are much more educated about home pricing. Websites like Zillow and Trulia are popular websites that buyers explore. Zestimates are not accurate but many buyers believe they are. If your home is overpriced, buyers simply will not bother looking at it.
- Appraisal Problems – Even if you do find a buyer willing to pay an inflated price and the buyer is financing the home an appraisal will be completed. If your home will not appraise for the purchase price the sale may fail.
- Competition – Overpricing helps the competition. If your neighbors house is priced in line with the market, you will not like when the sold sign gets put up and you are struggling to get showings.
- Stagnation – The longer your home sits on the market, the longer buyer’s say “What is wrong with that house?”
- Tougher Negotiations – You may receive a low ball offer and it may be harder to come to a “meeting of the minds” on pricing.
- Lost Buyers – Buyers normally search for homes by price ranges. If your home is overpriced and in the next price range, you will lose a percentage of buyers. These buyers are looking in the price range that your home will eventually sell for.
There are some agents that will list your home for the overpriced amount that you want to without providing why this is a bad idea. I don’t just want my sign in your yard, I want your home to sell in the quickest amount of time. You will want to price your home at market price or perhaps a little lower to encourage a bidding war. Stay realistic in your pricing and you will accomplish your ultimate goal of selling your home.
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