As the spring market fires up, new listings are starting to pop up on the market daily. If you are serious about selling, pricing your home competitively will help you sell it quicker and closer to your original price.
So what happens when you overprice your home?
Your home sits on the market longer.
When you put your home on the market, you want it to spark interest. When your home first goes on the market, it should be appealing and at a price point similar or better to comparable homes in your area. If the home is not priced right, it may be ignored, or worse, noticed by buyers and placed into a “wait and see” category.
Longer on the market equals more expenses.
Every month your home remains on the market, you are paying mortgage interest, utility bills, insurance, and taxes. With a high price, there is no negotiating up. If there are no takers month after month, you are giving money away that you should not have to.
When your home first goes on the market, it will be considered by any number of buyers as long as the price is comparable to others and as long as your real estate agent sells it correctly. It may or may not be what everyone wants, but is at least perceived in a neutral way.
The longer the home sits unsold, the more negatively it is viewed. It must be too expensive to sit for so long, or have something wrong with it. Real estate agents working for buyers may steer them away from your property, or tell them to wait for a drop in price. And when you do drop your price, some may see you as an easy target.
One of the questions that almost all buyers ask their agent is “How long has the home been on the market?”. They are asking this question for one reason and one reason only – how flexible is the seller going to be. It is safe to assume if your home has been on the market a while the potential buyer is going to feel like they can negotiate more. It is human nature to think this way because, in most instances, it’s the truth.
Sometimes, you may be lucky enough to get an offer at your optimistic price. A buyer may agree with you that your home is something special, and worth paying for. However, if the buyer requires financing, the bank may not approve the sale of the home due to the high price.
Online Search Problems
Most buyers use the Internet in their initial home search. Screening homes online involves putting in certain criteria into a search to screen out unwanted homes. It may seem a small thing, but when you price your home too far above the comps, you remove yourself out of these searches. If a buyer is pre approved for a home between $250,000 – $300,000, and yours is $350,000, it will not be seen.
You Help Sell The Competition
High priced homes help sell the competition. If there is a home in the neighbourhood that is comparable to the higher priced home, the buyer will most likely put in an offer on the lower priced home.
How to avoid this?
A good real estate professional will give you honest advice on where your home should be priced. Always ask for comparables on what has sold in your area to help in your decision making.