Every home seller wants to get the best price possible for their house. But there’s a fine line between getting a good price and overpricing. When you overprice your home, you run the risk of turning off buyers and attaching a negative stigma to your property. An overpriced home ends up costing you far more than just money in the long run.
Overpriced houses are unattractive to buyers
You may not realize your home is overpriced at first. But when your home sits on the market for months on end with little to no buyer interest, you might have a problem with the list price.
Once the newness factor on a for sale house has worn off, the more skeptical buyers get. They begin to ask why the home has been on the market for so long. What must be wrong with the house? This problem can quickly compound. The longer the house sits on the market, the more buyers think something it has problems. The more buyers are turned off, the longer the house sits, and the higher your stress level goes.
“It has been said that the most important part of marketing a home is setting the right price.”
Unfortunately, it’s hard to know if the problem is directly related to overpricing because buyers won’t necessarily say this to your face. But when your home is not at the right price point, the selling process can drag on, making it even more difficult as time goes on.
Overpricing increases your holding costs
You might want to sell your home for the money but if it won’t move on the market, you’re still stuck with the carrying costs of homeownership. In other words, you’re still paying the mortgage, taxes, utilities, and any fees or costs related to maintenance. If you’re staging the house, this is also a huge potential monthly expense.
The problem is even worse if you’ve already moved to a new place. This means you’re probably paying for two places at the same time. All of this has an affect on your financial life and can exacerbate your living situation, making you feel strapped for cash.
Why overpricing happens
Obviously, you want to get the most money out of your home sale. But the value of your home is based on what the market is willing to pay, not what you might calculate on a spreadsheet. If no one is willing to buy it, then it’s likely they don’t think it is worth the price tag.
Sometimes overpricing happens when sellers refuse to take the advice of the professionals around them. It can be easy to get stuck on a number and not want to relent until you get it. That mentality can be beneficial in so far as it gives you confidence to meet your financial goals. But it can also result in waiting too long to lower the price.
Other times it could be the professionals around you who are pushing you to overprice your home. Some agents can try to win your business and tell you what you want to hear rather than give realistic quotes about what your home is worth. To get you onboard and boost their commissions, agents may mismanage expectations.
Additionally, there could be the rare case of working with an inexperienced realtor who isn’t familiar with the market. They’re interested in selling the house but lack the awareness to price the home properly. Perhaps they simply misjudge the market.
How to avoid overpricing
It has been said that the most important of marketing a home is setting the right price. But getting the right price can be more difficult than it appears. It requires a mix of doing your homework to understand current market trends and comparable home values, while also employing tactics to attract the maximum number of prospective buyers.
For example, getting the right price requires understanding how listing websites work and ensuring that your house will show up in the most searches possible. If a large number of people in your area are searching for homes under $500,000 in your market, pricing your home at $510,000 may cut you off from countless potential buyers.
There is no easy way to know all of these tricks. You’ll want to consult with a professional and do your research. Frankly, learning how to price a home accurately is a skill gained over years of industry experience. Figuring out how to do it takes up a ton of time, effort, and mental bandwidth. Meanwhile, overpricing is a hassle that can leave you frustrated and jaded with the home selling process.
The good news is that it doesn’t have to be this way. If you want to sell your home as-is and get the best price available, help is available. Contact Sundae today to learn more about how we can buy your dated or distressed home without the hurdles of the conventional listing process.
Michael leads Sundae’s Southern California operations based in San Diego. Prior to Sundae, Michael developed his residential real estate expertise at LendingHome and as a partner at Upward Trend. He also held roles at PGI Investments, a private equity firm based in Carlsbad, California.