As hard as I try to explain to all of my sellers that they need to have a solid pricing strategy before entering the market for sale sometimes it is still so hard for all of them to understand the high cost of waiting. The market always speaks to real estate sellers. One must understand that there is a huge difference in results from showing feedback that says “yes but” or anything other than “we love the house and want to buy it”. “Yes but,” is a polite REALTOR and buyer saying your house is overpriced and we are not going to buy it at that price. Not adjusting quickly always costs sellers to much more in the end.
7 Deadly Sins of Overpricing
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 to “leave room to negotiate”. To avoid this temptation, let’s take a look at the seven deadly sins of overpricing:
1. 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.
2. No Showings
Today’s sophisticated home buyers are well educated about the real estate market. If your home is overpriced they won’t bother looking at it, let alone make you an offer.
3. 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.
4. Selling the Competition
Overpricing helps your competition. How? You make their lower prices seem like bargains. Nothing is worse than watching your neighbors put up a sold sign.
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?
6. 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 and because it is overpriced compared to the competition.
7. 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 don’t see the home because the price is above their pre-set budget.
Most buyers look at 10-15 homes before making a buying decision. Because of this, setting a competitive price relative to the competition is an essential component to a successful marketing strategy.
If you have questions about pricing your home correctly in today’s Greater Raleigh Area Real Estate Marketplace feel free to give me a call at 919-235-0007.
Have a great week,