Overpricing your home is probably one of the most common mistakes first-time sellers make. Not only are you alienating a huge part of the market, but you are also decreasing the likelihood of a sale by pricing your home too high.
It's a common seller misconception that if they price their home high initially, they can lower it later. More often than not, this is not the case.
The second a new listing comes on the market, there is an initial frenzy of activity surrounding the property from buyers. This is a crucial time when both potential buyers and their real estate agents see it and and take notice.
If the home is overpriced, it won’t take long for potential buyers to lose interest. By the time the price drops, a majority of buyers are lost.
Here are a few other reasons why the price has to be right.
- Multiple Listing Service Computer searches are selected by price range. Your home may NOT be selected by the computer as a possible property for an agent to show. The agent may have a buyer who will pay $150,000. If they search the computer up to $150,000 and your home is listed at $153,500 in the computer, the computer will not even select it for that agent to show.
- Even if the agent expands their search to include your home, many potential buyers won't look, thinking your home is over their limit.
- Buyers shop by comparison. Those who look at your home at too high a price may decide to make a bid on a more reasonably priced home.
- Appraisals are required on all new loans. Buyers realize that to get a loan to purchase your home the bank or mortgage company will have to agree to the value.
- Properties left on the market for extended periods of time usually become "shopworn", just like old merchandise in a department store. Many buyers believe something is wrong and will only buy at a greatly discounted price.
- Overpricing tends to dampen the other salesperson's attitude, making it less likely for them to show your home.
- Overpricing lengthens marketing time and invariably results in a lower selling price than would have been otherwise obtained.
Properties have to be shown to be sold. Price your home so both will happen.
