Overpricing a Home

Overpricing a Home

When it comes to selling a property, one of the biggest mistakes that most sellers will make is overpricing a home. It’s an understandable notion because you want to get the most out of your property, but there are many complications that arise when you place too much value into the home itself. It is a natural thought to earn a little profit from your sale, but in order to sell the home you will need to be reasonably when it comes to pricing.

The Disadvantages of Overpricing a Home

Fewer Offers: You might get a few offers, but this works against you as many of them will not be reasonable in terms of how much they really offer. An overpriced home tends to turn away offers because the price itself is very intimidating which may result in 0 offers. In real estate, the more offers that are received, the more likely it is to sell the home.

Less Likely to Sell: While it may seem that you are establishing an asking price from which you can negotiate, the truth is that overpricing your property is really counterproductive as it turns off potential buyers. Basically, you want to start with the actual value of your home and then perhaps add a little to the price, but going too far will simply turn away potential buyers instead of embracing them.

Dissuade the Right People: The right person to buy your home is generally one that is attracted by a good offer. If you overshoot when pricing your home, you will turn away those who are very likely to make an offer and potential purchase. The good buyer is one who is mindful of their money and is looking for a good deal. It is actually quite rare to find someone who will pay too much for property.

Longer to Sell: Not surprisingly, it takes longer to sell your home because you are receiving fewer offers. While you may be lucky and get a good offer early, statistics say that overall you’ll be waiting longer than if you had put out a reasonable price for your home. The longer it takes to sell your home, the more complications may develop.

Missed Opportunities: You are missing out on opportunities when you overprice your home with a rising interest rate on mortgages. Before, mortgage rates were at the rock bottom which attracted many new home owners. Today, many economists are predicting that mortgage rates will rise considerably which means that fewer people will think about buying a home.

Bottom line: It pays to do the proper research so you can avoid overpricing a home. Start by finding out how the last two to three homes in your neighborhood sold for and use that as a baseline. One mistake to avoid is that if your home has something additional like a deck or pool that does not necessarily mean that you should jack up the price since such additions may turn potential buyers away who may not have the same appreciation as you do of these additions.  Price the home right or even a bit below market and the home will sell quickly regardless of the market condition.