Even in a seller’s market, you can still push the price of your home to its glass-ceiling limit. In rare cases, a home may sell for higher than the listing price, but most of the time homes will sell near what the value is appraised for.
An experienced real estate agent knows the ebb and flow of the market and can accurately estimate how a home could be priced. Below are some things sellers can expect if they overprice their home for sale along with motivations for listing their properties at a high price.
828 Real Estate is here to help you sell or buy a home. Let us help you price your home for sale.
Why Do Sellers Overprice Their Homes?
There are a few general reasons why sellers may overprice their homes for sale. Sometimes sellers may not completely understand the current real estate market.
Some other reasons why sellers may overprice their homes include:
- Not knowing where to start when selling their home: Some homeowners may be oblivious to the true value of their property and set a price without research.
- Not having a clear understanding of why they are selling their home. There are many reasons to sell, but why are the sellers specifically selling?
- Expecting a bidding war: Some sellers want 2-3 parties to compete in an auction-style bidding war for the best and highest price.
- Waiting for the right seller with an all-cash offer: All-cash offers are appealing because they are considered before traditional loan offers.
What to Expect if You Overprice Your Home
If you insist on listing an overpriced home, you can expect a good chance of the house not getting many views or showings.
Consider this: You’re looking through homes on a listing website and see a price that’s about 20 percent higher than what you’re able to pay. What would you do?
Most likely, you would pass on to other homes. You probably would not even see the house because your price settings were not that high!
If you decide to overprice your home, expect these 5 things to happen.
#1: The Listing May Expire on the Market Unsold
Put bluntly, if you overprice your home, expect it not to sell – quickly, at least. Overpriced listings may expire on the market unsold which could be a bad thing if you are in a hurry to sell or need to sell your home in order to buy a new one.
If your Multiple Listing Service (MLS) listing expires, your agent will hide your listing for viewers.
Your listing agreement will also end the agent’s obligation to help you sell your home. (Not to worry, there are things you can do to reaffirm the contract.)
#2: You May End Up Making Less
If you overprice your home it will not most likely sell for that price. You actually may end up making less!
Real estate agents work hard to get home listed on the market. If a property does not sell there is a good chance you will need to pay agent fees anyways.
Putting your home on the market for the proper price on the first go-around will make for a smoother transaction process.
#3: The Home Might Not Appraise Well
If you list your home above its appraisal value you might be in trouble when it comes time to wrap up the home purchase agreement.
Closing a property is a more straightforward process for both you and the buyer if the home is priced correctly the first time.
If you’re trying to sell your home 20 percent over appraisal value, you will be disappointed when the price needs to come down because of an appraisal gap.
#4: Buyers Having More Leverage to Negotiate
If you overprice your listing, you will get fewer offers. Thus, any offer will look enticing and buyers have more leverage to negotiate.
There is a chance a buyer will send a lowball offer knowing that you may not have many offers to consider.
A home that’s priced competitively will encourage good offers.
#5: Your Neighbor’s Home is Selling Quicker
If your neighbors’ homes are selling and while your home remains on the market know that you are making the competition look better than you!
Competitively set prices get the home sale. You are not because the property is priced too high.
The buyer may think, “Both homes are comparable in placement, land, exterior, and interior, but Seller A’s home is priced at 20
percent higher than Seller B’s. I will give an offer on the cheaper home.”
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How to Avoid Overpricing Your Home
You can avoid overpricing your home by contacting a real estate agent in your area. At 828 Real Estate, we specialize in helping you navigate the fluctuating housing market and set the price of your home accordingly.
Our real estate agents know what it takes to sell a home in the High Country of North Carolina. We desire the best for our clients – reoccurring customers and new friends. Contact us today.