The Dangers of Overpricing Your Home
Although a higher asking price looks good on the net sheet,
it can work against you in objective #1:
Getting Your Home Sold
An asking price that is beyond market range can adversely affect the marketing of a property.
By asking for a carefully thought out comparative market analysis (CMA) from your REALTOR®, you can feel assured that the price you are asking will fall within the market range. The price of your home is not what you want to get out of it, nor is it what you bought it for plus all of your improvements, but a consideration of the sale price of similar homes in the area, the pricing of actively listed homes, and the evaluation of why other homes failed to sell.
The following graphs show the effect of showing activity on an overpriced home:
- Marketing time is prolonged, and initial marketing momentum is lost.
- The property attracts “lookers’ and helps competing homes look better by comparison.
- Fewer Buyers are attracted and fewer offers are received.
- If property does sell above market value, it may not appraise, and the buyers may not be able to secure a loan.
- The property may eventually sell below market value.
By pricing your home correctly at the beginning, you reap more activity from buyers and don’t risk selling for less when the buyers come by and say: “It’s been on the market how long?? They are probably desperate to sell! Let’s low-ball ‘em…”