Four Reasons Sellers Inadvertently Overprice Their Home
It is not uncommon for a seller to inadvertently overprice their home. And as we all know, an overpriced home sits on the market since buyers will not see it as a viable option. Most buyers won’t even ask to look at your house if it is priced too high. Here are the four most common mistakes sellers make when pricing their home.
1. Personalized Home Improvements:
Sellers often believe that the amount they spent on a home improvement is how much they will get back when they sell the home. Not all improvements are the same. A custom paint job or adding new trendy "high end" finishes is great for your personalized look. However, these little details may not have the same added value to potential buyers that they do to you. In fact, they may even detract if the buyer feels it’s not their taste and they will need to redo it to their personal taste.
2. Using Inaccurate Comparables:
Sellers will sometimes use websites to compare their home to similar ones in the area. However, this can give you an inaccurate home value as it does not take into consideration the difference between communities. Some nearby neighborhoods may have different amenities, lot sizes, school districts, or be more convenient to commuter routes. All of these and more affect what the market value of the home is. Talk to your real estate agent to get the most accurate list of comparable homes on the market.
3. Emotional Attachment:
Selling your home is an emotional time. This may be the first home you bought, your first home as a couple, or may be the place you brought home your first child. Many times it can be hard for you the seller to separate these emotions from determining your asking price. Keep in mind a potential buyer will not have the same attachment to your home.
4. Pricing High To Leave Room For Negotiation:
On many TV shows the buyers always offer much less than the asking price. So sellers today think in order to get the actual price they want they must overprice. Sounds like a great idea, right? This way when the buyer sends a lowball offer you can counter with the price you actually want. This line of thinking, in fact, is not the reality of the real estate market. You are in a much better position if you price competitively and draw a strong offer, or even multiple offers. The right price will sell! If you are priced too high you could put off buyers and they won’t even choose to see your home, let alone make an offer.
So how do you know if your home is overpriced? There are two big red flags that can alert you to an overpriced home.
1. You have had no showings or offers
2. Similar homes have come on the market or closed at lower prices than your home
If either of these is happening to your listing, you should give your agent a call and discuss reducing your price. The market determines what your home is worth and what a buyer is willing to pay for your home. You want to make sure you stay competitive and not become a stale listing that is overlooked on the market.
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