In our experience, over-pricing is far and away the costliest mistake Sellers’’ make in our local market.
We are very proud of our robust real estate marketing capabilities, but even the highest quality marketing can’t overcome an over-priced product. Not in real estate, or any other industry. The market will ultimately determine the correct price.
Today’s home buyer is smart and well-informed thanks to all of the real estate market data available to them online. Often home buyers are more informed than their Realtor!
Over pricing your home will probably help your neighbor sell their home!
The biggest and best opportunity to reach the largest audience of active home buyers is within the first week or so of the listing first hitting the market. An incorrectly priced property that does not reflect the local market will likely be ignored by home buyers and local agents. Or worse, you’ll probably help your neighbor sell their home!
If a home stays on the market too long, buyers and agents will suspect that there is something wrong with the property thus prompting lower future offers.
Below are some myth-busting elements for over-pricing listings
- The most common rationale for Seller’s to overprice their home is that they think that they need room to negotiate the price. Home buyers search online for homes priced between typical retail price points based on their criteria. If the home is priced too high for the local market, Sellers’ lose those the opportunities to engage the buyers in the first place.
- Pricing a few thousand dollars over a rounded price point. Buyers search in price ranges and if you price a home at $609,000 you potentially fall out of the search ranch for buyers who set $600,000 as their limit. It also means that you need to be competitive with homes in the next highest pricing segment.
- Worrying about receiving “low-ball offers” is an old school pricing mistake and is a misunderstanding how the contemporary real estate market works.
- Seller chooses a Real Estate Agent that over-promises a high selling price just to get the listing.
- Using the wrong inputs for pricing a home: A common error is keying off the price of another active listing in the neighborhood that hasn’t sold yet. The market price is mostly determined by comparable homes that have closed escrow in the past six months and that is what agents, buyers’ and appraisers look at in determining market value.
- Misreading local market trends: Newspaper reports of real estate sales trends usually reflect activity that originated 45 to 60 days prior. A sudden uptick in inventory can transform a seller’s market to a buyer’s market within weeks.