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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.
