As a seller, you want a good return on your investment. That’s understandable.
However, there are multiple reasons why overpricing your home is a bad idea.
Asking too much for your house could end up costing you more in the long run. That’s why you need to start off with a price that more closely matches your home’s true value.
Your emotional attachments naturally grow on a house the longer you live there and considering the investments you put into the home over time, your emotions can cloud your judgment, making you feel like your home is worth more than it actually appraises for.
Keep in mind, the chances are slim that someone will buy your house with cash. They are more likely going to need financing, which means their bank will do an appraisal on your house. And if you are asking more than the bank is willing to loan your potential buyer, that bank won’t approve the deal.
So that one reason alone could be enough to discourage a seller from overpricing their home.
But there are other consequences. Here are several more reasons why overpricing your home is a bad idea.
Reasons Why Overpricing Your Home is a Bad Idea
These are some of the negative consequences to overpricing a home.
1. Fewer people will come to see your home showing.
Real Estate agents helping buyers are savvy to the market and are (or should be) able to tell if a home is overpriced. A good agent will know the prices of comparable homes in your area.
Most of the time, buyers simply don’t make an offer on an overpriced home. Instead of making a “lowball” offer that could offend the seller, they simply stay away from these potentially embarrassing situations.
2. Overpricing destroys online search results
Google is where buyers begin their search now. They know their budget. They have a number in mind.
Pricing your home too much will take your home out of the appropriate price range, and many potential buyers will never see your online listing.
Here’s one scenario as an example: Someone wants to sell their home for over $400,000, and they price it at $420,000, thinking they will “haggle” with buyers and end up selling it somewhere between $420K and $400K.
What happens online though is that buyers who have a $400,000 budget end up not seeing the listing, as their search results will say “homes priced up to $400,000″ or something like that.
3. The wrong buyers will be drawn in with an overpriced home
Home buyers conduct their search with a price range in mind. They understand what to expect from a home in that price bracket. If your home doesn’t have the features and amenities expected, buyers are going to take note and move on. By not attracting the right audience, you will not sell your home anytime soon.
4. Your competitors will be happy you overpriced your home.
This makes sense: when a buyer looks at your home and then visits a different home that has the same price, but that other home includes more features, the competitor looks like the better deal.
5. The overpriced home will take much longer to sell.
Most likely, it won’t ever sell. You’ll end up reducing your price, which leads to #6…
6. The overpriced home eventually gets reduced, which lowers impact
Once your home has been on the market at a price that’s overvalued, the price will eventually need to be reduced, and that makes less impact than a new home on the market correctly priced, to begin with.
A Professional Can Help You
If you need expert advice on pricing your home correctly, contact Alina and she will introduce you to a local real estate agent who knows your market.