One of the most important factors in selling your home is setting an asking price that properly reflects its true value. Being realistic about this number may be all you need to tip the selling scales in your favor. Of course, sellers are likely to provide themselves with all sorts of reasons for setting the price point above par:
- “I’m in no rush to sell.”
- “My home has so many more upgrades than my neighbors.”
- “I need room to negotiate down.”
- “If someone really wants my house, they’ll pay the full asking price.”
- “I just want to test the market and see the response.”
But, overpricing your home can have the opposite effect of a large pay day – resulting in a home for sale that remains on the market for many, many months followed by price reductions, inconvenient hassles, and long periods of uncertainty.
We are presenting three reasons why overpricing your home is not a good idea.
1. The first 30 days are crucial to capture buyers’ attention.
Buyers and sales professionals alike are constantly watching the market for just listed properties. They are looking for the perfect home to matches their needs, and then they can swoop in and make an offer before anyone else does. Conversely, when a home has been on the market for many months, it has buyers wondering what may be wrong with it. They may opt to skip a showing altogether.
2. People won’t even see your listing.
According to the National Association of Realtors®, 88% of all buyers search online when shopping for a home. Don’t forget that these buyers use search criteria – especially when setting a price range for homes they can afford. If the buyer searches within their price range, for example, $275,000 – $300,000 and yours is $310,000, it won’t populate into a results page for many qualified shoppers.
3. The buyer can’t get a mortgage for the full amount if the current market conditions don’t support your sale price.
The loan is based off of the lesser of the two, contract purchase price vs. appraised value. If the appraisal comes in low, then the mortgage needs to be reworked and the buyer is responsible for the difference between the two.