Overpricing Your Home
If you're selling your home this statement has probably crossed your lips at least once. "We can always go down, but we can't go up. When setting a pricing strategy for your home, is it a good idea to start high and work your way down, especially in a market flooded with inventory? Probably not, as most experts would advise that the best way to increase your odds of a successful sale is to price your home at fair market value. But, as logical as this advice sounds, for many sellers it is still tempting to tack a few percentage points onto the price. Avoid the temptation to pad the price and "leaving room to negotiate". Let's take a look at the seven deadly sins of overpricing your home.
the 7 Deadly Sins
Appraisal problems
Even if you do find a buyer willing to pay an inflated price, the fact is over 90% of buyers use some kind of financing to pay for their home purchase. If your home won't appraise for the purchase price the sale will likely fail.
No Showings
Today's sophisticated home buyers are well educated about the real estate market. If you overprice your home they won't bother looking at it, let alone make you an offer.
Branding Problems
When a new listing hits the market, every agent quickly checks the property out to see if it's a good fit for their clients. If your home is branded as "overpriced", reigniting interest may take drastic measures.
Selling The Competition
Overpricing your home helps your competition. How? You make their lower prices seem like bargains. Nothing is worse than watching your neighbors put up a sold sign.
Stagnation
The longer your home sits on the market, the more likely it is to become stigmatized or stale. Have you ever seen a property that seems to be perpetually for sale? Do you ever wonder - What's wrong with that house?
Tougher Negotiations
Buyers who do view your home may negotiate harder because the home has been on the market for a longer period of time. Mainly because it is overpriced compared to the competition.
Lost Opportunities
You will lose a percentage of buyers who are outside of your price point. These are buyers who are looking in the price range that the home will eventually sell for but won't see the home because it's above their pre-set budget.
One popular myth is that a great marketing plan will overcome overpricing your home. Nope - spending millions of dollars on advertising, internet ads, and television spots won't motivate buyers to pay you more. Another myth is the assumption that a buyer will see your home, fall in love, and write you a check so the competition doesn't matter. Wrong. Buyers don't look at homes in isolation. Most look at 10-15 homes before making a buying decision. Because of this, setting a competitive price relative to the competition is essential to successfully market and avoid overpricing your home.
Don't make the mistake of Overpricing Your Home and avoid the the 7 Deadly Sins !
For more tips and information on selling your home, check out our related posts below!
from Trulia.com
