Understanding Overpricing

Overpricing: It’s one of the number one reasons that properties don’t sell in a timely manner.  Why do so many sellers do themselves a disservice of overpricing their homes?  Here are a few of the most common reasons:

  • Personal Goals:  For some it’s about selling their home for more than the neighbor did last month. For others, it’s refusal to accept that their home isn’t worth as much as they would like it to be or that it is worth less than what they paid for it.
  • Financial needs: Some sellers will put their home on the market for a price higher than what the comparables in the area are so they can afford to move into a bigger  home, pay off some bills, have a little extra in savings, etc.
  • Lack of professional guidance:  Some sellers do not have all the data they need to price their home.  The guy next door sold for $200,000.  What they don’t understand is that the guy next door has 300 sq feet more living area, he is totally updated, etc.  Sometimes, family and friends can influence a sellers decision on where to price. 
  • Testing the market:  Sellers will  put their home on the market for unrealistic values to see if someone will bite. If they do, then great, if not, well, no harm done, the seller doesn’t have to move. 

If a seller does indeed get lucky enough to get a purchaser into contract, be aware, the home still has to appraise.  If the appraisal doesn’t meet the contract price, the purchaser’s lender will not lend the monies to them.  Renegotiation happens at this point.  A seller may also be helping to sell his neighbor’s home.  If the neighbor is priced right, chances are that the overpriced home won’t even get looked at.

Take all these things into consideration when pricing your home.    As a real estate professional, I want you to get the most you can from your home, I want you to be happy.  Ask for copies of what your agent has used for comparables.  Discuss these numbers with your agent.  In some cases, they will be willing to “push the envelope” a little bit, but not so much that they price you out of competition.  Remember, we are all working for the same cause…Getting your home SOLD!

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