When selling your home, it is very important to price it at market value right off the get go, to avoid a long listing and to ensure your receive top dollar. Nine times out of ten if you start off with your home overpriced you are likely to end up with even less than if you just priced your home properly from the beginning! Buyers looking for a home, also beware of overpriced homes, a home is most likely going to be the biggest purchase of your life and you definitely don't want to be over paying!
How to know if a home is priced reasonably:
When I say comparables ("comps") I mean other homes of similar size, with similar details, in similar shape in the same neighbourhood. ***You cannot price a home based on another home price in ANOTHER city!*** When a realtor gives you a price range it is based on comps in the area that have SOLD, to get the true value you must compare sold properties, you have an idea going by those which are active and obviously don't want to list or buy a home that is $100,000 more than a similar home in similar shape in the same neighbourhood!
DAYS ON MARKET
Your Realtor can tell you how many days a home has been listed, every neighborhood and every style of home has an average days on market. One sign a home is overpriced is if a home of similar character in the same neighbourhood as another has been on the market twice as long, take a look... price is likely the culprit!
IF THE HOME IS NOT UPDATED OR KEPT WELL
You have two homes both built in the 80's, in a VERY desirable area, one home has had the windows replaced, kitchen and bath updated, new flooring, updated exterior, and the other home is au natural... These homes should NOT be priced the same, and some sellers may believe that au natural adds charm... and while some buyers may feel this way as well the VAST majority is going to go for the updated home. The simple fact that work and money have been put into the one home makes the value of that updated home higher!
Now this typically only applies to the seller, as a buyer is unlikely to be able to gain any knowledge of previous offers on a property. If you receive multiple low offers this is a CLEAR sign your home is over priced and it's time to start thinking about a reduction! As a buyer, you can ask your Realtor to ask the sellers agent for information regarding previous offers, but don't hold your breath because this does NOT have to be disclosed by the sellers agent.
How to tell if a home is overpriced... By Candace Gillanders Century 21 Foothills Real Estate