Why Overpricing Your Home Can be a Costly Mistake.

Most home sellers are unaware that their home is overpriced. They have spent many wonderful years in their house and tend to see a value where a potential buyer may not. The family memories created in the home, however, do not make up for the outdated baths, small kitchen and need for repairs. In the eyes of a buyer, an overpriced home will immediately be overlooked as they move on to other homes that are priced appropriately for the market.

Overpricing a home in many cases will lead to “chasing the market” in which detrimental consequences can occur. As the home is overlooked by potential buyers due to price, it will sit on the market without activity. Eventually the price will need to be reduced and possibly reduced again to reach actual market levels. By this time the home has been on the market for many months, and may appear to buyers as if there are underlying problems. In addition, the fact that your home is overpriced will make other properly priced homes look like a bargain.

Put simply, a home priced accurately the first time has a greater opportunity of selling quickly and for a higher price. Some homeowners argue that a buyer could come along and buy the home at the higher price, however, the reality is buyers are knowledgeable and are always aware of comparable home prices. They will immediately dismiss your home, or submit low ball offers more in line with market prices.

The main takeaway on pricing is very simple; pricing a home appropriately from the beginning is the best way to sell quickly and for the highest price. Once a home has started to chase the market it is often too late, and the homeowner will typically end up selling for a price lower than the original market value.