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Dangers of Overpricing Your Home
Dated: January 14 2020
Overpricing your house is one of the biggest mistakes a seller can make and it can be the single thing that deters buyers from your home. People overprice for many reasons such as wanting to pay off debt, looking to invest in a bigger or more expensive house, or looking for their return on investment from the time spent in the house. It is natural for a homeowner to believe their house is worth more because of all the memories, upgrades, and improvements done to the house over the years, but it is easy to get caught up in what you believe is valuable and what the buyers’ market believe is valuable. The more time your house sits for sale the less valuable your house becomes.
You can easily miss out on a group of buyers that are actually looking for houses like yours but the price puts it just outside their range. People search for homes in ranges of prices. People who are looking for properties $999,999 and under, generally search in increments of $10,000. For example, single family homes between $150,000 and $250,000. A buyer who is looking for a property might not come across your property if it’s priced just slightly higher. Many sellers will list their house just right below to keep in specific search ranges such as listing it as $249,999. People who are looking for house in the $1,000,000 or more will generally search in increments of $100,000.
It is important to use a Realtor and the tools they have. Realtors can produce a comparative market analysis (CMA) which will pull information about surrounding and similar houses and help create a correct and competitive price for your home. Realtors are trained to assess the CMA, track the market trends, and take a look at current inventory to come up with a reasonable price for your home. While it is a good idea to get a couple different prices from different listing agents, going with the highest price one has to offer isn’t always the best bet.
If your house has been on the market for 30 days will no activity it is then a good time to assess why. Majority of the time price is too high and lowering the price can increase activity and hopefully offers. It is said that your house gets the most activity and exposure its first time it is listed. While lowering the price can create exposure, people might believe you are lowering your house for reasons different such as something is wrong with the house.
On the opposite end of the spectrum, pricing your house too low can be beneficial in certain situations to gain a higher price. If your house is priced lower than competitors it becomes a little more appealing and there is a high chance that you will receive multiple offers to drive the price up. Vice versa, if your house is priced higher then others in your neighborhood, it makes their house look more attractive at a lower price. While it isn't recommended to price your house low, the side effects are not as harsh as an overpriced house. Speak with a licensed Realtor to get help pricing your home.
Remember, a seller doesn't determine the price of your home, the buyer does! Contact one of our agents at Homeward Real Estate and let them help you accurately price your home!
Hi! Here is a little about me. I've been in real estate in Tampa since 1997. I started Homeward Real Estate after gaining experience as a Broker/Manager in the Re/Max system. As much as I loved work....