6 DANGERS OF OVER PRICING YOUR HOME
Timing is everything: Very often, a seller asks, “We can always come down later — right?” Historically when your house goes on the market, the most significant potential for buyer traffic is in the first 30 days, by pricing it high to drop the price later.
Showings shut out: Agents should do what is best for their clients. With inventory high, agents will undoubtedly choose to show properties within their buyer’s price range and meet the current Fair Market Value. Showing overpriced listings does not fall into that criterion.
Benefits the competition: Unfortunately, when a home is overpriced, it not only sits on the market but acts as a selling point for market-priced homes. It’s a cue to buyers to say, “I can get the same house for less!”
Lender trouble: Even if an agent agrees to list your home too high, and even if you were to find a buyer willing to pay more — these are both BIG IFs — today’s lenders are extraordinarily cautious now.
Time on market: Overpriced homes will sit on the market. Unfortunately, extended time on the market forces the question of the possible more significant problems within the property’s walls in a buyer’s mind. What are the first two things a buyer asks when considering a property? What’s the price, and how long has it been on the market?
Lower proceeds: Unfortunately, when a home starts listing life overpriced, it almost always sells for less than market value. With few buyers to choose from, zero leverage because of time on the market, too high an asking price, and carrying costs to maintain the property, most sellers find themselves getting the least from their investment rather than the most.