Overpricing: the chain reaction

THE CHAIN REACTION OF OVERPRICING YOUR HOME

Many sellers make the mistake of trying to start high on pricing, hoping to sell their property at the highest possible price, then assuming that they can lower the price down the road if the property does not sell. This can be very damaging to the end result. In fact, it’s highly counter-productive. Here’s why:

YOU HAVE A REDUCED NUMBER OF SHOWINGS

The #1 rule in selling is to generate consistent showings for the property. Overpricing results in a reduced number of showings. With little activity, your chances of selling the property reduce dramatically.

MANY BUYERS WON’T EVEN KNOW ITS THERE

Since most buyers typically look within a specific price range, you are excluding potential candidates by pricing above their interest level. Sometimes the smallest price adjustment can open your property up to a significantly larger pool of buyers.

SELLERS ALWAYS ASK “WON’T BUYERS ATLEAST MAKE AN OFFER?”

At first glance this seems like sound logic. In reality, overpriced listings deter buyers from further interest in the property because they mentally “move past it” thinking their offer and efforts would be in vain since they’d offer a much lower price anyway. That lower price as it turns out is typically a more accurate measure of its true market value. In the end it has the exact opposite effect as intended.

OVERPRICED PROPERTIES SELL YOUR COMPETITION

If you’re a seller, the best thing that can happen to you is overpriced competition. It makes your property seem like a great deal! That spurs further interest and eventually offers. So why would you want to help sell the competition?

THE CHAIN REACTION… LONGER MARKET TIMES CREATE BUYER HESITATION, LOWER OFFERS, AND A WEAKENED POSITION DURING NEGOTIATIONS.

Once buyers realize a property has been on the market for a long time TWO things immediately come to mind. 1.) What’s wrong with this place? 2.) They must be getting desperate! In addition, as trivial as it may sound during the pre-listing process, it’s important to consider the time commitment and frustration associated with long market times. It’s a significant amount of work to properly prepare and continuously maintain a home for sale.

It is imperative that the price is thoroughly researched with comparable properties in the area. Additional factors such as your competition and the current state of the market also play a large role.  If your property is priced correctly, you’re taking the foremost step in selling your home for the best price possible in the shortest amount of time. Good luck!