If you are attempting to sell your home then you obviously need to attract as many interested home buyers as possible. Price is always an issue for home buyers. That’s not to say that an expensive home won’t sell- it means that an overpriced home won’t sell. Consumers today are savvy, and home buyers are no exception. Rest assured that anyone that’s in the market to buy a home today is comparing prices of as many homes in an area as possible and will be able to tell the difference between reasonable and inflated prices.
Many sellers feel that if they inflate the price in the beginning that they will end up with an offer that is closer to what they actually hope to get for the home. Others may feel that maybe they will actually get a better price than perhaps what the home is truly worth, as compared to similar homes for sale in the immediate area. Both of these strategies are a BIG mistake for home sellers. Here’s why.
Over Priced Homes Receive Fewer Offers
This is the reality of real estate. Even if a home buyer is interested in making you an offer, there’s a good chance that they won’t even bother to negotiate if they price is unreasonable. Why? Simply because an interested buyer will assume that offering too much below the listing price is a waste of time and that the seller won’t even take the offer seriously. Would you bid $230K on a home that is listed for $300K even though it seems overpriced compared to similar homes in the area? Of course not. You’d continue to search for other homes in area.
Tenure is Good for College Professors, but Bad for Real Estate!
If the average home in a given area is selling within about 6 months but your home has been listed for 12, you’ve got a problem. Home buyers will get the impression that something is “wrong.” An overpriced home tends to stay on the market much longer than other homes which can eventually lead to some very low offers- quite the opposite of why the seller overpriced the home in the first place. Prospective buyers will feel comfortable enough to make low offers because they might assume that the seller is becoming desperate and might be willing to “settle” for a low price just to sell the home.
Too Much of a Good Thing is Bad
As home seekers continue to see your property advertised over and over again they might form the wrong impression of your home. After all, if it’s a fair deal why has it been on the market for so long and why has it still not sold? In other words,, they may wonder “What’s wrong with it”? As you already know, that’s not a good way to sell your home.
You Can’t Recoup Wasted Time
Eventually the owner of an overpriced home will be forced to reduce the asking price in order to gain more interested and serious buyers. It’s either that or hope that someone will be willing to pay the higher price or at least make a reasonable offer. The odds of either one of these things occurring after an overpriced home has been on the market for a while is close to zero. The end result will be that the price will need to be lowered in order to sell the home. If this had been done from the beginning, a lot of time and wasted energy could have been saved and the home may have even been sold by now.
The Final Outcome
After reducing the price on your home, the crisis may still not be over. Now that your asking price is comparable to similar homes in the same area it is still possible to receive low offers from interested buyers. As mentioned above, many people will see a considerable price reduction as a sign of desperation and may try to capitalize. Sometimes, the homeowner may actually need to take a lower offer than expected if they find themselves in this situation. This all could be avoided by not overpricing your home from the start.
Hopefully, after having read this article you will better understand why overpricing is a very bad strategy when attempting to sell your home. It can possibly lead to accepting less than what the home is worth or possibly not being able to sell it at all. If you are ready to place your home on the market, be sure to use a reputable and knowledgeable real estate agent. He/She can help you to determine a fair asking price for your home and avoid the downward spiral of over pricing.