Selling your home and thinking of asking a higher that what your agent suggested? This way after negotiations and counter offers you get the original asking price? Beware these pitfalls or overpricing your home.
- Less people will see your home. Buyers often shop in price brackets and rounded numbers. If the majority of people are shopping for 100K-200k homes, they may never get the opportunity to see your home listed at 200,999. Those shopping in the next price bracket will be looking for the most home they can get in their range, eliminating yours as a viable option.
- Apathy. Imagine a home having a “sell by” date of a few weeks. Every day a home is on the market it loses a little value in buyer’s eye. After so many weeks on the market it can become stale creating a loss of interest from agents and buyers.
- Actually helps competing houses. Because they look more appealing in comparison. Why would a buyer purchase your home at a higher price when comparable homes are more enticing with the lower price?
- Marketing Momentum is Lost. Once the buzz of “new listing” has worn off, no amount of marketing can sell an overpriced home.
- Paperwork Complications. If your home actually gets an offer that’s above market value, it may not appraise at that value, causing the buyer to be unable to secure a loan for the asking amount and causing the deal to fall apart.
- Fiduciary Duties. Good agents can tell if overpriced, and in looking out for their client’s best interest, will probably navigate their clients clear of an overpriced listing.
- Time: Time is the enemy in real estate. Too much time spent on the market gives the buyer the upper hand in the deal. Many homes that have sat and sat, receive low ball offers if any at all.
- Costs you more money. The longer your home stays on market the more mortgage payments, home owners insurance, HOA fees and maintenance costs you have to pay. These fees will cut (if not gauge) into your profits.
- Net Less. Desperation to sell can lead to price drops which will ultimately lead to a lower price than the actual value of the home in the long run.
Remember that pricing your home for sale is ultimately up to you, but most of the time your agent knows best. Most buyers are nonchalant and patient- they are not willing to go through hassle of haggling the price down to something more affordable. They will wait till your price drops or move on in their search.