Beware of the dangers associated
with overpricing your home!
If your home is priced above the market value, you will not attract prospective buyers who would otherwise be prime candidates for your home. If your price is too high:
- Your home may be priced beyond the search criteria of otherwise qualified buyers
- Agent/Brokers may neglect to show your property to potentially qualified buyers simply because it is out of their desired price range
- Comparable homes with similar features for a lower price will seem more attractive to buyers; you could actually be helping to sell your competition’s home
- It implies that you are not truly motivated to sell
- Fewer prospects will respond to our marketing
- Fewer buyers will consider your home and fewer offers will be received
- You may lose buyers who are willing to negotiate
- Marketing time is prolonged, and initial marketing momentum is lost
In addition to these factors, a home that sits on the market for too long acquires the stigma that there may be an inherent problem with the property. When you price your home too high in the beginning, you may ultimately need to drop your price below market value in order to attract buyers back to your home. The property may, in turn, eventually sell below market value.
Sellers often want to start with a higher asking price and test the market thinking buyers will offer less if they really like the home. However, the first few weeks are your property’s prime selling time.
As a property comes on the market, there is a backlog of existing buyers who have been actively evaluating and shopping for properties. In the first few weeks that your house is on the market, interested buyers will be excited to see if your home is what they have been searching for. Price and street appeal directly affect time on market. If your home is priced right and shows well, you have the greatest opportunity to sell your home at this time.
Within the first few weeks of being on the market, virtually all existing active buyers will have viewed your property. By week 5, (as shown in the graph below,) interest in your property declines as you wait for new buyers to begin their home search.
As buyers research the market and begin to view homes, they quickly gain a perspective of the relative value of different properties available to them. Buyer’s agents also have access to comparable sales data so both the agent and the buyers can quickly recognize when a property is overpriced. In most cases buyers would rather negotiate with a seller they feel is realistically priced than one who is priced too high.
Being market ready, with accurate, competitive pricing on the day that your home is placed on the market is critical.
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