“We don’t want to leave any money on the table”
This is a common thought for a lot of home sellers, but pricing your home right the first time is critical to generating showings and getting the best price for your home. Below you find the most common issues with overpricing your home.
Home sellers need to consider price points along with market conditions when setting a list price (see our previous post on price points). If the fair market value for your home is $340k and you decide to list your home for $355k instead of $349k, you could be missing out on a lot of home buyers that have set their maximum search criteria at $350k.
Longer Sales Time
Savvy buyers will use the market information that their Realtor provides to analyze all of the homes that are available in their priority neighborhoods. An overpriced home will stand out and possibly scare away buyer prospects. Fewer showings equals more days on market.
Because an overpriced home will typically sit on the market longer than a home priced at market, buyers see this as an opportunity to submit a low offer. This will make for a tougher negotiation to get the buyer up to your comfort zone.
Helping the competition
An overpriced home will make fair-priced homes stand out as a bargain. If there are 10 homes listed for sale in a particular neighborhood, your overpriced home may drive buyers to the other listings first.
Making a Bad First Impression
When your home hits the Houston MLS, all of the Agents in the area will see it online and brand it as “overpriced.” Agents don’t like to show homes that are overpriced and they will quickly spread the word to other Agents in the area.
A big part of selling your home quickly and getting a good price is showing activity. An overpriced home will have fewer showings and will generate fewer offers. Getting the price right from the beginning will increase the possibility for success.
Even if you find a buyer that is willing to look past the market conditions and over-pay for your home, it is very likely that it will not appraise. This will cause big problems with the buyer’s financing and almost always results in the seller lowering the price. This isn’t worth the hassle.