It's common knowledge that if a house isn't selling, then there must be something wrong with the home itself, or the way it's marketed, specifically its price. It's understandable that home sellers want to make a profit on their home. That is why most of them think that it is alright to price their home so high. Today's post explains why it's advised to avoid overpricing your home.
It goes without saying, but overpricing your home will lower the number of offers you receive. A recent post from Your White Knight explains why pricing your home too high discourages buyers:
Discourages possible offers
An overpriced home discourages prospective buyers from making offers, if the difference between the asking price and the todays market value is substantial. Many buyers choose not to waste their time on overpriced homes, and prefer to spend their energy looking at homes that appear to be a good value. Via yourwhiteknight.com
It's simple: home buyers usually have a price range that they take note of when they are looking to buy a house. If you overprice your home, then you'll only cater to a few people who are willing to spend a huge amount of money. Chances are, though, they are looking for a much better house than you might offer.
The next reason to avoid overpricing is it doesn't get you showings. Home buyers will avoid seeing a home that they feel is overpriced. Showings can lead to the next phase of the buying process, so cutting out that stage does a number on your prospects:
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.
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. h/t h2hrealty.net
This is in line with the first reason above: home buyers are knowledgeable and they won't bother making an offer for a house that they think is overpriced.
Lastly, pricing too high gives neighbouring houses an edge. It makes sense: there isn't likely to be that much home variation in a neighbourhood, so if you manage to make everyone else look like a bargain, you're doing yourself a disfavor:
Neighboring properties are priced lower
Selling a home can be emotional. Often, high listing prices are the result of sellers adding sentimental value. It is important to consider the listing price your real estate agent suggests. They have looked at final sales prices of comparable homes in your neighbourhood before determining the value or your home. If your home is priced above neighbouring properties, you could very well be asking for more than what your home is worth in the eyes of prospective buyers
If your real estate agent suggests a price, don’t pressure them to list your home at a higher value. Read more at bhgrealestateblog.com
It's not very useful to make your competition a much better option than your own home.
Before settling on a listing price for your home, it's important to do the right market research. If you're looking to sell your home, give the A-Team a call.
Overpricing your home sells your competition because they have a lower price!