A Realistic Pricing Strategy Is Your Best Choice When You’re Selling
One goal when you’re selling your house is to get as much money as possible. It’s tempting to overprice — there’s always a chance you might score big. Right?
Technically, yes. But that doesn’t mean testing the market by setting your home’s price above what the house is worth is a good strategy. In fact, there are many reasons not to test the market this way. If you price your home too high, you are helping your neighbor to sell their home
It’s great to be a good neighbor, but unintentionally sacrificing your sale to help your neighbors sell their homes might be going a bit far. When you price too high, you’re helping sell the other homes in the neighborhood that have listed for less. After seeing your high-priced home, buyers may be eager to get the better-value house nearby — even if they liked your home better.
You Lose Credibility
Buyers are savvy. They’ve usually done the research and have a ballpark idea of what homes in your neighborhood are worth. When you price too high, sellers might not even look at your property.
Not Everyone Likes To Play Let’s Make a Deal
A common reason sellers price high is that it leaves room for negotiation. The problem with this tactic? If buyers overlook your house because it’s out of their budget, there will be no one to negotiate with. While some buyers might enjoy the negotiation process, a solid buyer respects and appreciates a home priced just right.
You are turning people into “yes men” Some sellers who price high are given false hope by agents who are uncomfortable telling their clients the truth. Beware of sign agents, What’s a sign agent? Some agents may agree to any price you want just to get their sign on your lawn. Instead of listing at the inflated price, sellers needs to “come to realistic expectations of what the home will likely sell for.
You Squander The Early Days
Sellers are in the driver’s seat the first 30 days a house is on the market. The listing is still new, so you have buyers’ attention. The ideal scenario is that you price to sell in the first two weeks, that way, you stand to get multiple offers. When you price a home too high, you waste some of the time [during which] you have the most leverage with any potential buyer.
Your House Gets Stale
If your house is on the market longer than 30 days, buyers will start wondering whether something’s wrong with it.We refer to this as a stale home, When you price your home too high, all you’re doing is putting blood in the water for the sharks who will wait until you lower your price.
And here’s the real problem: When you do drop the price, you often get less for your house than if you offered a realistic price from the start. The longer a house sits on the market “translates directly to a larger discount from list price to ultimate sales price.
People Won’t Even See Your Listing
People generally set up search parameters by price when looking online for a home. Let’s say your house is worth $219,000, but you’re asking $230,000. You won’t capture buyers who search for houses within the $200,000 to $225,000 range. But if the house were priced properly, it would show up in the buyer’s search results.
The House Won’t Appraise At The High Price
If you’re selling to buyers who are getting a mortgage — in other words, most buyers — the lender will need an appraisal. If comparable home sales over the last six months and current market conditions don’t support your sales price, then your buyer won’t get the mortgage.
If you’re set on a higher price, consider making improvements that add worth. One great source for suggestions? Is your real estate agent.