Overpricing homes for sale continues to be the number one factor that derails property owners’ plans. Whether you dream of cashing in on real estate for profit, or desperately need to sell a house to move, asking too much can be your number one threat.
So how are high asking prices so bad? How much is too much? And who shouldn’t you ask for a home value estimate?
1. Your Home is Less Likely to Sell: The bottom line is that if you over price your home, it is less likely to sell. If you really want to sell, or need to sell your home, it is counterproductive. Leaving a little negotiating room isn’t a bad concept. In fact, most expect it. But if you breach certain barrier, the likelihood of your home selling will dramatically dive. That can have serious consequences. If it doesn’t prevent you from buying another home, it could at least mean holding onto an extra property, and all the costs and risks associated with that.
2. Less Likely to Attract Offers: Overpriced homes for sale are less likely to attract offers. If you don’t even get offers, you aren’t going to sell. Fewer offers also generally means a home will ultimately sell for less, and on inferior terms. Obviously it is far better to have 100 highly qualified buyers begging to buy your home, on your terms, than one that wants a ton of concessions and a ‘steal.’
3. Less Likely to be Looked At: Overpriced homes are less likely to be viewed by both real estate agents and home buyers. They won’t be visited by real estate brokers previewing properties for clients, won’t be shown to their clients and buyers will pass over them. An overpriced home listing shouts that the seller or agent is unrealistic, or is just going to be a nightmare to work with. Who has time for that today? Nobody has time to waste calling on these properties or traveling to see them.
4. Not Seen by the Right People: If overpriced homes are seen, they are unlikely to be seen by the right people. Unfortunately, most individuals seriously underestimate the vital importance and value of pinpoint accuracy in pricing homes for sale. Miss the bracket by just $100 and your home listing can be virtually invisible to home buyers. Especially to the prospective buyers and agents you want to reach the most. Even if your listing is noticed, it won’t matter if the wrong people are looking at it. Either they’ll dismiss it for being too expensive or it won’t match up to the value they are seeing in other competing listings in that price bracket. Realtors might even use it as a ‘boomerang home’ to make other listings sell faster and look more attractive.
5. It’ll Take Longer to Sell: If your home does sell, it will probably take longer. This can mean fielding all sorts of wild, low ball, and offensive offers. It’s not their fault. They’ll just assume that you are going to be desperate because no one else has purchased the property. The longer it sits the less attractive it will be, fewer eyes that will see it, the lower the offers will be. Every day means escalating holding costs, the risk of loss or damage, and a day you aren’t getting closer to your real goals and dreams.
6. Lost Opportunity Costs: Don’t underestimate lost opportunity costs either. Especially not in the current rising environment. In some areas homes and land have already easily been appreciating by 25% to 50% a year. Even a modest interest rate increase of a couple percent on top of this will drive up the cost of buying another home by hundreds of thousands over a 30 year loan. Whether real estate investor or simply moving personal residence; missing out because of an overpriced listing is going to be seriously expensive. For some it may even mean missing a new job opportunity or not being able to be with family during a crisis. For others it will mean missing out on hundreds of thousands of dollars.
Summary
Asking too much can be the best way to sabotage your dreams. Some even under price their listings to drive a bidding frenzy and ultimately sell for more. Online home value tools can sometimes be very inaccurate for gauging the right asking price. Some Realtors might even tell you what you want to hear to snag your listing. Do your own real research, talk to a local appraiser, and get a second opinion. Then price for success.
