Many California homeowners are making a critical mistake which has the potential to not only prevent their homes from selling fast, but for a fraction of their value. Recent statistics have indicated a partial slow down in U.S. home sales. While much of this is certainly seasonal and a result of recent surges, this is only a part of the issue. Real estate experts are acknowledging that some sellers and their Realtors have gotten a little too ambitious and overconfident, resulting in properties being listed significantly above what the market will bear.
The U.S., and especially the California housing market, is definitely turning around and will continue to improve. There may even still be some ‘name your price’ neighborhoods where homes are selling within hours of word they will be listed for sale. However, for most overpricing, high property listings aren’t just counterproductive, they can have severe consequences. Homeowners can’t afford to overprice their properties. In particular, the following circumstances may hurt those who choose to do so:
- Those facing foreclosure
- Those with property damage which will worsen over time (i.e. leaks and foundations)
- Those needing to sell houses fast
- Those hoping to or needing to walk away with cash after a sale
- Those that need to move and can’t afford two housing payments
- Any homeowner eager to protect their credit and avoid negative financial consequences
Overpricing a home in California will result in a lot of inactivity. Best case scenario – it may create a lot of hassles for buyers that aren’t serious or qualified. Having said that, overpricing a home in a state where prices are already high will weed out non-serious buyers. More often than not, the property will just be missed or ignored by what should be the best prospective buyers for a given property. By increasing the price, you are essentially eliminating buyers form an already small and cautious pool.
After a couple of days, the listing just begins to collect dust, and becomes less and less attractive. This might be okay for those just testing the market and fine with not selling for another year or two. However, California homeowners in foreclosure facing ongoing penalties due to liens or code enforcement issues may simply be putting the final nail in their own financial coffins.
Even for those that do end up getting bites on their homes or that pull down listings and re-price them, there can be a risk of serious financial loss. Overall, the state and nation’s home values are heading up and foreclosure and distressed sale activity may be slowing, but that doesn’t mean there aren’t a significant number of them still out there.
Foreclosures, short sales and other lower home sales can bring down a property’s value by limiting its appraised value. In some neighborhoods it could easily be a case of one step forward, two steps back. Rising interest rates will also impact home price increases, or at least what buyers can afford.
So what’s a better strategy for those that want to sell their CA homes, and fast?
Price smart or sell for cash in a timely manner. Getting too greedy may prevent you from selling your house all together.
