Why Overpricing Your Home Is A BAD IDEA!
| Myth | Reality |
|---|---|
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Realtors® discourage overpricing the home because they want a fast sale with the least amount of work involved. |
Neither agents nor sellers determine market value: Only the market itself – willing and able buyers – establishes value. |
Six Possible Downsides Of Overpricing Your Home:
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BUYER DEMAND ⬇️ Your Lose Your Peak Marketing Time
The first few days after initially listing your home are critical, as this is when you will get the most views of your listing online. If your home is priced well above market rate, you run the risk of scaring off buyers, significantly decreasing buyer demand. Futhermore, the first 30 days your home is on the market, you have the most leverage as a seller. Your Listing is fresh and you have buyers' attention. When overpriced, you will lose traffic and attention during that critical 30-day window.
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DAYS ON MARKET ⬆️ Resulting in Buyers Having More Leverage
The Longer a home sits - Days on market will heavily influence what a buyer is willing to offer on your home. The longer your home sits, the more they will feel confident in negotiating and the possibility of low ball offers increases. Here’s the other reality about overpricing a home (of which we just experienced with a quick market change): the longer the home sits, the higher the chances are of the market changing unfavourably. If there is a downturn in the market, you may have to drop the selling price to considerably lower than the market rate was when you had listed it initially, leading to a greater loss.
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NO SHOWINGS!
The fastest way to know if you overpriced your home is by the number of buyers viewing your home through the home open and private viewings– especially when the home is initially listed. If your home has been on the market for several weeks and zero buyers have shown interest in scheduling a viewing, that is a tell-tale sign that your home may be overpriced. Host an Open House the Seller says! Having several people attend an open house may make the seller feel as though they priced their home correctly, but if no one puts in an offer – even those who expressed interest at the open house – the home is overpriced.
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YOU MAKE THE COMPETITION LOOK MORE APPEALING
If they have to choose between two similar properties, buyers will typically go for the cheaper one. This decision makes sense, especially if your home offers nothing to justify the price difference. As a seller, it may be tempting to keep the high price on the assumption that someone will eventually buy it. In reality, however, your home will only spend a long time on the market, while making other homes in the area seem more affordable.
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PRICE REDUCTIONS
Every time the price is reduced on a home, buyers will become increasingly suspicious. What is wrong with the home that the price keeps dropping? Buyers may also take note that you have been consistently dropping the price every few months and may just be waiting to make an offer until you bring the price down a bit more.
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HELLO LOW BALL OFFERS!
Overpriced homes will most likely receive offers that are at or below the market rate. This leads to tremendous frustration on the seller’s part and a lot of wasted time and energy turning down lowball offers.
Have Questions?
Text, Call, Email – I’m here to explain how the Market will affect your unique situation and how I can help you determine the selling price of your home.
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