The Pitfalls of Over-Pricing a Home for Sale
Toying with the idea of pricing your home high to see how much you can get? Here are some points to consider before making that decision…
1. “Let’s try and see how much we can get.”
The first two weeks on the market your home will have the most attention and often the most showings. Prospective buyers are likely to either not look at your home, or not make an offer, thus losing the momentum you might have created initially.
2. “Buyers will still make an offer...”
When a home is priced above market value, buyers tend to not even look at it. If they do look at the home, this often just confirms to them it is overpriced and they will not make an offer because they think the seller believes in the price and is not likely to come down.
3. “We can always lower the price if it doesn’t sell.”
Yes, you can, and this happens often. However, the most interested buyers from the beginning have now probably found homes, and if you end up lowering the price more than once, people begin to wonder if there is something wrong with the home. The days the home is on the market gets longer, and buyers become wary.
4. “Someone will fall in love with it and pay our price!"
Even if a buyer falls in love with the home, unless they are paying cash, the home must appraise for the offer price for the buyer to obtain financing. An appraiser is going to compare your home with others that have sold recently in your area to determine the value of your home. Financing issues will arise if the home does not appraise.
5. “We can always negotiate.”
Negotiations are much more difficult when the home is overpriced. When the seller comes down on price during the negotiation, the buyer is likely to reply that the discount does not count because the starting point was artificially high. This puts you in a weaker negotiating position.
If you find yourself in a situation where your home is overpriced, the solution is to lower the price to market value as soon as possible to position your home to sell.
Remember, your home has the most chance of being seen and sold quickly when it is priced at market value.
Want to know more about pricing your home, or the current real estate market in our area? Reach out to Lanier Property Group today to start the conversation!