7 Sins of Overpricing your Home

Research conducted by the National Association of Realtors show that more buyers purchase their home at Fair Market Value – not above it. Most professionals would agree, that the best way to increase your success of selling your home for the highest price possible and in the shortest amount of time, is to price your home at Fair Market Value. But for many sellers they like to “leave room to negotiate” by increasing the price above Fair Market Value. To avoid   this common misconception, let’s take a look at the 7 sins of overpricing your home:

1. Property wont Appraise – Even if you find a buyer willing to pay above the Fair Market Value, 90% of buyers finance their large purchase. If your home does not appraise for the purchase price, the buyers lender will not lend them more than the home is worth and the sale will likely fall apart.
2. No Showings - With today’s technology most buyers are well-educated about the real estate market. If your home is overpriced, your home will not generate any interest. Buyer’s wont bother looking at it let alone make an offer.
3. Marketing & Branding Issues - Agents act quickly when a new listing hits the market. If your home is marketed and branded as “overpriced”, you will end up chasing the market. Dont get left behind!
4. Selling the Competition – The wrong price attracts the wrong buyers, if any. It creates a bad reputation for your home in the market place and makes properly priced homes look even better. Would anyone intentionally put their home on the market to help sell the competition…?
5. Home becomes Stale – Your home generates the most interest the first 30 days it is on the market. If your home is not properly priced, you will miss out on peak levels of interest and will become stale. Have you ever seen a home that has been sitting on the market for a long-time…? Do you ever wonder, What’s wrong with this house…?
6. Tougher Negotiations - If a buyer does view your home, they may negotiate tougher and submit a “low ball” offer to try to take advantage of the situation.
7. Opportunities Lost – You will lose a percentage of buyers who are outside of your price point. These buyers are looking in the price range that the home will eventually sell for but wont see the home because it is out of their pre-set budget.

Nearly 15 – 25% of all listing do not sell. The market rejects them. In other words the market did not accept the Marketing/Branding Effort, the Price, the Condition, the Location or a combination of these areas – perhaps all four of them.

The good thing is that you control 2 of these areas: Price and Condition. The price of your home should be based on the price of SOLD properties in your area rather than the list price of properties now on the market – this is how the Fair Market Value is established, what today’s buyers are willing to pay.