Real Estate News October 18, 2019

Why Overpricing Hurts Sellers in the End

I would consider this a factual statement:  All sellers would love their home to sell for the highest possible price.  Understandable.  Unfortunately, this strong desire and motivation is the reason why it’s so easy for agents to “buy” listings. If you’re not familiar with the concept, “buying” a listing is when an agent tells a client their home is worth far more than the market value in order to win the listing.  This tactic is unscrupulous, but sadly it isn’t illegal.

Sellers are susceptible to this tactic because they want to believe, however irrationally, that their home is worth more than comparable homes on the market. This is usually a result of persuasive reasoning given by the agent.

Occasionally, sellers truly believe pricing your home on the high end is either an acceptable risk or even a benefit. Below are a few arguments they give to their rational, and why this line of thinking is a problem when it comes to selling a home.

  1. “I can always come down in price later if I have to.”

Yes, it’s possible that someone will find the house irresistible and pay the inflated price, but the odds are the house will languish on the market until the price comes down. Buyers, though, will see this from a different perspective. They’ll be thinking: What’s wrong with the property? Maybe I can get this house for significantly below market value.

  1. “I have to keep the price high for negotiating purposes.”

A house isn’t a used car. Don’t start far above what’s acceptable in order to pad out the negotiations. Buyers will have access to the same market data, and their agent will have a pretty good idea what the home’s true market value should be. The ruse will quickly come to pieces, so why not price right for a quick, fair sale?

  1. “This is the price I need to get for my house.”

If that’s true, sellers should also be prepared to stay put when the house doesn’t sell. Despite dire and important reasons why lower offers can’t be accepted, the market is indifferent to the seller’s situation. There are other homes and other sellers unencumbered by the same reasons.

  1. “A house just like mine sold for this price… so why not mine?”

Sellers will assume houses are identical. Odds are there are other outstanding reasons the home sold above market value, especially when it comes to interior renovations.

We truly understand there are a variety of emotions and factors involved in finding the correct selling price for your home.  We can help.  We have numerous tools and ways to analyze the market to help you arrive at an accurate listing price.  A price that we feel will get the property sold quickly. When you are ready to talk numbers, we will be happy to give you an accurate valuation for your home. Contact me at (928) 710-9148.