The Pitfalls of Overpricing your home

When it comes to getting the most money for your home with the least headaches in the shortest possible time, nothing can stop that more effectively than overpricing. In fact, its the number one reason homes don’t sell.

The first 30 days on the market

Very often a seller will ask “If we start high we can always come down later – right?” Historically, when your home goes on the market, the greatest potential for buyer traffic is in the first 30 days. By pricing it high with the intention of dropping the price later, you are completely shutting out your best buyers.

Prejudice other Agents against introducing buyers

We will always offer a conjunction agreement and share our commission with any other agent who can introduce a buyer that we are not already dealing with. With stock levels high and plenty to choose from, other Agents with potential buyers will take the easiest path and introduce their buyers to properties that are within the buyer’s price range and that meet the current Fair Market Value

Benefits the competition

Unfortunately, when a home is overpriced, it not only sits on the market but acts as a selling point for other market-priced homes. It’s a cue to buyers to say ”I can get the same thing for less, just down the road”

Buyer Finance Approval problems

Even if an Agent agrees to list your home at too high a price and even if he finds you a buyer willing to pay it – these are both big ifs – Lenders today are very conservative. They base the amount that they are prepared to lend a buyer on accurate valuations and Valuers must base their valuation on comparable properties that have sold. If the Valuation does not support the selling price, then the Lender will simply not approve the loan

Time on the Market

Overpriced homes will simply sit on the market. Unfortunately, extended time on the market raises the question in a buyer’s mind as to what other problems there may be with the home. Put yourself in the buyer’s shoes. What’s the first two things a buyer asks when they consider a property? What’s the price and how long has it been on the market?

Lower eventual sale price

When a home starts its Listing Life overpriced, it almost always ends up selling for less than market value. With few buyers to choose from, zero leverage because of time on the market, too high an asking price and carrying costs to maintain the home, most sellers find themselves getting the least for their property, rather than the most.