Dangers Of Overpricing Your Home

There are many factors to consider when pricing your home for sale. A good REALTOR® will ask some very important questions about both your reason for selling and your time frame to get it done. depending on your goals we can give you a few different options and explain the pros and cons of each so that you can make an informed decision that best fits your needs. You may need to sell quickly due to a job transfer. Mabey you’re purchasing another home contingent on the sale of your current one. Overpricing your home can be costly in the long run. This can cause stress and hurt your bottom line. Lets look at some of the problems we see with over priced homes.

You Lose The Excitement A New Listing Generates

New listings get the most activity in the first 30 days on the market, that’s generally when we see the highest and best offers. That is because all the current buyers working with agents are just waiting for new homes to come to the market to look at. When we work with buyers we set them up with a new listing alert. This will sends them automatic emails of new homes that fit their search criteria. After that initial hype of the new listing, typically the buyers that will look at your home are new in the market place. Some properties sit on the market for 6 months or more due to overpricing.

You Lose The Most Qualified Prospects

Knowing they can not afford anything above their range, buyers will most likely pass on viewing over priced properties. Buyers also don’t want to pay more for a home than a comparable one in the same neighborhood. The people who do see your home as part of their search, will wonder why your asking price is as high as larger nicer homes. As REALTORS®, we generally have a good idea when looking at a property if it is over priced.

Our clients may not be willing to even make an offer. If buyers make an offer they feel is reasonable, the seller may feel insulted and flat out reject it. If our buyers make a full price offer they run the risk of the house not appraising for their loan. In that case they can ask the seller to lower the price, which they may or may not be willing to do. Depending on the buyers finances they can either come in with the difference in cash or cancel the contract and have to start their search all over again.  Most buyers may not be willing to risk the contact falling apart towards the end of the transaction. Especially after they have already paid for home inspections and other costs.

Overpricing Your Home Helps Sell Other, More Competitively Priced Homes First

Your home may be used to demonstrate the good value in other properties. Your objective should be to enter the market in a position that will attract prospects, not push them away.  As stated above buyers may look at your asking price and features and compare it to another home priced the same but has been priced appropriately for that home. Likely leading them to make an offer on the other home instead of yours.

Your Home May Become Stale On The Market

A home takes on a reputation surprisingly fast. When in a market where homes are selling quickly, Prospects may begin to wonder why your home has been on the market so long or if something is wrong with the property.  You may have to eventually lower the price and accept less than market value just to get it sold. The key take away is don’t wear out your welcome to the market.

You Lose A Strong Negotiating Position

When your house is on the market a long time you lose a strong negotiating position financially and mentally. When buyers see how long your home has been for sale, they may feel like they have the upper hand to offer a lot less money for your home. preying off you desperation. There are quite a few investors that look for homes that have gone stale in the market, in hopes of swiping a great deal on a home they can rent out of flip for quick profit.

As you can see there is a lot that can go wrong when overpricing your home. Having a knowledgeable REALTOR®, is a must when selling your home. It’s our job to be honest with you and set realistic expectations. Ultimately it’s your choice where you want to start you listing price at, but we will inform you of the risks involved beforehand. If you have any questions we can answer for you or would like to get a CMA ( Comparative Market Analysis ) done on your home here in Cochise County please contact us. We are here to help!