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We’ve all seen them – homes that are on the market and priced so high that one wonders what decade the owners were comparing their home value to. But if you think about it – the goal of these people is to end up with more money in their pocket at the end of the day. The truth is that when sellers price their home for more than what the market dictates it is worth, there are some pretty dire circumstances. Here are three reasons why you should shy away from pricing your home too high, instead making a strong effort to price it effectively.
Buyers Don’t Like to Deviate Too Much From the Asking Price
Whether because of perceived rigidness on the part of the sellers or to save themselves the embarrassment of their offer being rejected, many buyers shy away from bidding on homes that are overpriced. They have no idea of the reason you may have priced your property so high and the last thing they want to do is get tangled in a bidding tug of war only to be the loser at the end of the day – so they don’t make an offer in the first place.
There is a Misconception That Sellers Knows Their Home is Overpriced
Thinking that the sellers deliberately have overpriced their home, many buyers feel that if the seller is willing to accept a lower value then they just priced the home accordingly. This is a turn off to serious buyers so rather than mess with it they move on to other properties and an offer for the overpriced home never makes it to the table.
Buyers Assume That Previous Offers Have Been Rejected By the Seller
A home that is priced higher than it should be makes the impression that the seller is not willing to budge. Buyers take one look at such properties and assume that other offers were probably made based on the property’s fair market value but the seller likely leaves no room to negotiate. In actuality, these homes almost never receive offers, leaving the seller in the dark and buyers to move on to other properties.
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The single biggest financial disadvantage of listing a home too high is that it won’t sell and the seller will either have to channel more money into the home to get some offers on the table or they will have to reduce the price to get it sold. The interesting thing is that the reduced price is often lower than what would have been the asking price had the home been priced effectively in the first place.
Homeowners that end up pricing their home too high usually spend thousands of dollars more than they were trying to save in the first place. By practicing our tips and remaining aware of the reasons that overpricing is the worst thing you can do, you can sell your home for a great price instead of being one of the last houses on the block yet to sell. To learn more about great pricing strategies visit your Realtor to get customized, professional consultation. Nothing beats working with those that know the industry well!
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TIPS ON HOW TO PRICE A HOME
* Do your homework to find the current home value of your home. A Comparative Market Analysis (CMA) is best done by a professional Realtor and also you can get an appraisal done – something that will help in the lending process plus as you try to justify your selling price)
* Give your home the TLC it needs so it is an attractive catch to potential buyers. That’s a great way to justify your price. If you can’t get to the items that need fixing or if you would rather leave the aesthetics to your buyers’ so they can cater to their own tastes once they move in, be sure to reflect that in your price.
* Don’t get caught up in old prices that are no longer relevant in today’s buyer’s market. Price your home based on today’s statistics and be prepared to corroborate the figure with current market data that supports your number.
