Face Facts. Overpricing your home is BAD. Worse, in fact, than a rough case of the chicken pox. There are dozens of reasons overpricing is bad but a few stand out from the pack in terms of hitting your wallet when everything is said and done.
Overpricing your home makes the competition LOOK better.
When you price your home over the market value by even 5% or 10%, it makes other properties that are comparable to yours look better.
Overpricing your home destroys your ‘Window of Opportunity’.
The window of opportunity exists for this reason. When you place your home on the market, buyers are already out there looking. These buyers find your home through a Realtor or on a website and decide to go see it or not. These first few weeks of buyers are the ones already in the market. As time by, only new buyers look at a home that has been on the market a while. When your home is overpriced, you completely miss this initial influx of buyers. Even if you realize your mistake by week 3 or 4 the damage is done. Buyers don’t go back and look at houses they've already been show is overpriced either online or by a Realtor. There is a stigma on the overpriced home even though it is now priced at market value.
Overpricing automatically halves your number of showings.
A home that doesn't show doesn't sell. Even at market value, due to location, school, and misc. preferences, only 6 out of every 10 buyers that are looking at your price range will come see your home for sale. When you overprice your property by just 10%, your number of showings will drop in half. Now, only 3 out of every 10 buyers will come to see your property. The average property shows at least 8 times before there is an offer. By overpricing your home by 10% you have effectively doubled your home’s time on the market if it sells at all. Instead of being sold in 15 to 21 days, you are still making the beds, cleaning the dishes, tidying after the kids rooms, attending to extra details on a daily basis and wondering why your house has not sold when others have. The exact question you should be asking is “People have looked at our home and they choose to buy another?” Is it the Price or Condition?
I don’t give out this information to scare or intimidate sellers into lowering their prices. I do it to illustrate the fact that by overpricing your home you are hurting yourself and your family in the long run. If you only remember one thing about pricing your home, remember this:
Sellers do not determine a home’s value. Realtors do not determine a home’s value. Buyers determine the market value of any given property.
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