Avoid Overpricing Your Home for Sale
Did you know? The peak exposure to drive as many prospective buyers to a home in a quick-selling market is 21-30 days? This means the home must be in excellent upgraded condition, at an optimal price as compared to the homes that have “sold” in the same area with similar attributes.
One fallacy that some homeowners adopt is to overprice their home to inevitably arrive at a gross sales price they are looking for. WRONG! Contrary to what many home sellers think, overpricing a home does not lead to a higher sale price. It is the exact opposite. Overpricing has such an adverse effect on selling homes in the quickest amount of time for the most money. In today’s market, the best homes are often contracted within a few days and closed in most cases within 30 days!
Research and history tell us the problems with overpricing:
#1: One problem that often comes up with overpriced homes is an appraisal issue. Even if a buyer is willing to pay for an overpriced home, his bank might not be willing to. If the home does not appraise, either the buyer will need to pay the difference in the appraised value. And the purchase price OR the deal will most likely fall apart as the buyer will fail to obtain financing.
#2: One problem with overpricing is losing showing momentum and scare off the buyer. Good agents can spot overpriced homes and can influence the buyer to omit your overpriced home for the tour list. The majority of showings by sales associates on a new listing occur when the house is first placed on the market within the first 14 days. Sales agents arrange for their active, qualified buyers to see a home when it is newly listed. It’s important to position your home at the best price during its first market exposure.
#3: Overpriced homes take a longer time to sell and often at a discounted price. Overpricing a home causes the days on market to become bloated! The number one question that every buyer asks their agent is “how long has the home been on the market?” Some sellers are more motivated to sell quickly than others, usually falls within the first 45-days that the home is on the market. If your overpriced home is still on the market much longer than this, you risk having your listing expire – a scar on your history is hard to erase from a property. You also risk the market changing on you, and not in your favor; especially if you enter into a slower period in a season. When the days on market become higher than the normal, buyers will start to ask themselves, what is wrong with this home? This is just human nature and a very common thought process.