8 Deadly Sins of Overpricing YOUR HOME
The best way to increase your odds of a successful sale is
to price your home at a current and correct market value from the START of your listing!
But, as logical as this advice sounds, for many sellers it is
still tempting to tack a few percentage points onto the price to
"leave room to negotiate"
To avoid this temptation, let's take a look at the seven deadly sins of overpricing:
1. Appraisal Problems
Even if you do find a buyer willing to pay your inflated price, the fact
is over 90% of buyers use some kind of financing to pay for their
home purchase. (Cash buyers are out there but buyers still get loans.)
If your home won't APPRAISE for the loans purchase price... the sale will fail!
Appraisals older than 90 days are considered out of date.
What you paid years ago...means nothing in today's market.
2. No Showings
Today's sophisticated home buyers are well educated about the real estate market.
If your home is overpriced BUYERS won't look at it,
let alone make you an offer. If no one is looking at your home, they are
looking at other homes priced correctly. You are getting passed by.
NO SHOWINGS....PRICE IS TOO HIGH!
3. First 30 days are critical:
When a new listing hits the market, every agent quickly checks the property out
to see if it's a good fit for any of their clients.
If your home is branded as "overpriced" from the get go
getting buyers interested later may take drastic measures.
Agents want to make a sale they won't waste time with an
over priced home...too many others to choose from.
4. Selling the Competition
Overpricing HELPS your competition. How?
You make their lower prices seem like a bargain!
Nothing is worse than
watching your neighbors put up a sold sign
then you call your agent to lower the price...another missed opportunity.
5. Stagnation
The longer your home sits on the market, the more likely it is to
become stigmatized or stale. Have you ever seen a
property that seems to be perpetually for sale?
Do you ever wonder - What's wrong with that house?
6. Tougher Negotiations
Buyers who do view your home may negotiate harder
because the home has been on the market for a longer period of time.
If you are overpriced compared to the competition
buyers now think you must be.... desperate!
7. Lost Opportunities
You will lose a percentage of buyers, because you are outside the correct price point.
Buyers won't see YOUR home because it is OVERPRICED!
LOST OPPORTUNITIES!
8. USING YOUR HOMES EQUITY LIKE AN ATM MACHINE!
Here is an example: Mr. and Mrs. Smith purchase a home and pay 125,000.00. 1 year later
Mr. and Mrs. Smith take out a home equity line of credit for 50,000.00.
The Smiths decide to purchase a boat and an RV with the loan money.
Six months later the Smiths decide to sell the home.
The home is still valued at 125,000.00 but adding the original mortgage
and the home equity loan they now OWE $170,000.00.
Now add in the fees a seller usually pays when selling a home...
ie. Commission, Title Insurance, Taxes, Termite Contracts, Legal fees and more
you would probably need to sell your $125,000.00 home for a
full price offer of
$191,000.00
QUESTION: would you pay aprox. $65,000.00 more for a house valued at 125,000.00??
......Neither will anyone else.
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*Most buyers look at 5-10 homes before making a buying decision.
Because of this, setting a competitive price
in line with your competition is ESSENTIAL to selling your home in this market.
CORRECT PRICING IS CRITICAL TO YOUR SALE.
If your agent isn't helping you understand the
current market conditions... you may need to find a new agent.
Again...The Z-Team will tell you the truth about your home and getting it sold in this market.
An over priced home makes for along and stressed listing period.
"Why isn't my house being shown?"
well...it just might be the price.
If you want to sell your home and not just list your home
call the Z-Team, We have great marketing but we can't do miracles.