Why Overpricing Your Home Is Such Risk
As a homeowner, you've poured care and attention into maintaining your property, both for your own enjoyment and to enhance its resale potential. Now, as you stand on the brink of selling, it's natural to want fair compensation for your efforts. Why not aim for a tippy top of the market price to “see what happens”? Well, overpricing can be a big risk. Not only does it waste time, resources, and momentum, but it can also deter potential buyers. Here's why finding the right price matters:
1) Efficiency Makes an Impact
Overpricing leads to extended time on the market. The momentum of your marketing has a shelf life. An extended time on the market can create doubts in buyers' minds, making your property appear less desirable. Plus you have the hassle and expense of requiring you to maintain a showcase-ready home longer, often in vain.
2) Perspective Shapes Value
While you might have sentimental feelings that effect your opinion of the right price, appraisers and buyers might view it differently in comparison with local data. Pricing too high can leave buyers skeptical and unwilling to engage so a price strongly rooted in market data is key. Buyers might not even make an offer if the gap between their offer and your asking price is too large.
3) Appraisal Realities
Let’s say you DO get a buyer for that aspirational price - the appraisal could throw a wrench in the plans. Lenders won’t provide the buyer with a loan for more than they estimate the home to be worth based on similar local sales, so an overpriced home might not appraise at the listed value. This could cause financing hurdles for buyers that may very well lead to renegotiating the originally agreed-upon purchase price.
4) Counterproductive Conclusion
As a result of pricing your home too high, and being on the market for too long, you ultimately risk selling for not only less than you wanted but even less than market value in the end.
In conclusion, ensure your pricing aligns with market realities. If your home shows well and is priced right you put yourself in the best position to encourage a multiple-offer scenario that will ensure nothing is left on the table. Your home is a valuable asset, best marketed and priced to appeal to the discerning eyes of potential buyers. Remember, the market speaks volumes through showings and offers – price it right to maximize your home's selling potential. Need help to understand the data and determine that magic number? That’s what I’m here for!