Updated: Jun 8, 2022
If you’re looking to sell your home, it can be tempting to overprice it to, “leave room for negotiation.” However, some experts would advise that the best way to increase your odds of a successful sale is to simply price your home at fair market value. To avoid the temptation and ensure you don’t price yourself out of the market, let’s take a look at the seven deadly sins of overpricing:
Appraisal Problems - Even if you do find a buyer willing to pay an inflated price, the fact is that 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 your home is overpriced 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 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 and 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 that 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.
One popular myth is that a great marketing plan will overcome a pricing problem. Nope, spending a zillion dollars on advertising, internet ads, and television spots won’t motivate buyers to pay you more than the home is worth.
Another is to assume a buyer will only 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 between 10-15 homes before making a buying decision. Because of this setting, a competitive price relative to the competition is an essential component of a successful marketing strategy.
Call, click or email me today, and I can put together a FREE Comparative Market Analysis (CMA) that will give you an idea of what competitive price you could list your house at!
Real Estate Broker, Licensed in the state of Oregon
Published East Medford Life Magazine - September 2014
Shanon holds an MBA in International Business, loves writing in her “At Home with Shanon” column that has been delivered to 47,000+ homes in Medford since 2014, has appeared on the Real Estate Radio Show and was also featured on A&E TV network’s Real Estate Reality TV show.