When it comes to setting a price for your home when it goes on the market, you need to make sure you price it correctly from the beginning. You don't want to waste time on the market or the eventual selling price by overpricing it from the get-go. Consider these six dangers that come when you overprice your home when it goes on the market.
Timing is everything:
Very often a seller asks, "We can always come down later - right?" In today's technology-driven world, when your home goes on the market, the greatest potential for Buyer showings is in the first 30-45 days. When you price a home high when the intention of eventually lowering it incrementally, you miss out on your best time to attract potential buyers.
Showings never happen:
Buyer's Agents have a responsibility to do what's in their client's best interest. By showing them homes that are above their Buyer's budget or Fair Market Value, they are doing their client a huge disservice. When there is a higher inventory on the market, Buyer's Agents typically will show their clients homes that they believe are the best value that meets the Buyer's needs.
Benefits the competition:
Here in the North Carolina High Country, our homes are priced based a lot on subjective factors like views, useability of land, and water features on the property. Every buyer values those factors differently. Many times when you price your home to sell, you have to consider the competition. Depending on the time of year, you're pricing will be based on what else is available instead of what has recently closed. If you overprice your home, you may push potential buyers to consider other properties for sale on the market.
Lending trouble:
If you choose to list your home too high, and even if you find a Buyer willing to pay your asking price. You have to consider how that Buyer will purchase your home. If they need to get financing, the home must appraise for the agreed-upon price. If it doesn't, you may have to lower the contract price or lose a potential Buyer.
Time on market:
Here in the North Carolina mountains our real estate markets have "selling seasons." We typically see fewer Buyers during the winters and early spring. This leaves the summer and fall seasons as the best time to sell. If you overprice from the get-go then lower during the slower selling season, you may have to wait till the next selling season to find a Buyer.
Lower proceeds:
Unfortunately, when a home starts its listing life overpriced, it almost always sells for less than market value. With fewer Buyers to choose from, you lose your leverage because of time on the market. You also have to consider holding costs of it taking your home longer to sell. You may have to pay another year's taxes, HOA dues, and possible repairs caused by weather or accident.
If you're thinking about selling your High Country home Contact me today to find out how I can be of assistance to you!
