29 Feb Ask The Experts: What is the Downside of a Seller Pricing Their Property too High?
We asked the experts (our agents) what is the downside of a seller pricing their property too high? Read their responses below to help price your home right and avoid the pitfalls of pricing your home too high. Selling your home? Contact one of our agents to assist with all your real estate needs.
Nick Albright If it’s priced too high and they get no offers, they may lose the newness and buzz of the property. Also as the days on market rise prospective buyers may perceive the property as having something wrong with it.
Harley Coleman Being a new listing the first 2 weeks are the most critical because your listing is just that, new. Every buyer looking in your particular area wants to see it and this is the period when you’ll get the most attention and showings. A listing becomes completely stale after a month if overpriced and not under contract. Most buyers are well educated by an experienced buyer’s agent and the questions will start to raise from buyers on a home that looks nice but is not under contract yet. The questions that buyers first think of in these instances are…
1. What is wrong with the house? If buyers or their agents think for a second that something is wrong with your home they will move on quickly to the next house! They will think there may be hidden defects within the home and not consider it at any price and they definitely don’t want to spend hundreds and hundreds of dollars on inspections for someone to maybe tell them what they already suspected. So again, they will move on. Another question they will ask their agent is….
2. Is the house overpriced and by how much? An experienced buyer’s agent can figure out the value by doing a CMA (Comparative Market Analysis) and will not allow their buyers to pay more than what it’s worth anyway. And what sellers need to remember is is that if the buyer is financing the home, it will need to be appraised by a licensed professional appraiser and they will make sure that the bank will not lend too much or let a buyer pay too much than what it’s worth anyway, so why overpriced it? Sellers need to take advantage of that first 14-21 days on market and price the home right at the market value or maybe even a tad less, as crazy as that sounds. That will get ALL prospective buyers in there and give you the maximum amount of exposure to get the home sold at full price and probably even get multiple offers with many of them going over the asking price. In a sellers market, like the one we’re in, sellers don’t need to negotiate as much, if at all, if priced correctly. That is much better than pricing higher and “leaving room for negotiations”. If sellers listen to their agents and price it correctly they will sell their home faster and for the most amount of money!
Larry Kruse Yes, there is always a chance that whatever a property may be over-priced .. there is going to be that ‘one’ buyer who must have the property at nearly any cost. But, realistically, in normal playing fields .. too high of a price will exclude many buyers because it is out of their range .. and the issues more and more is the property will likely not appraise. In the current escalating (and recovery) market, the properly priced home will be in the power alley of the sold comps and the current competition. It’s ok to be agressive with the competition .. but, make sure you are in the acceptable range that you will be one of the houses to get shown. I tell my Sellers .. that I personally call this ‘acceptable range’ … that ‘we need to be in the horse race’ … if we are in the race .. together, we will make sure that we win.
Adam Kruse They are thinking, “Lets just see what happens, someone can make us an offer, or we can always drop it” But then buyers come through and think, “I like it, but not at that price” Then time goes on, and eventually we start dropping the price. We say to the owner, “There has been 45 people through here, and the overwhelming feedback is the price is too high” So then we drop the price to where it should be, but the Days on Market is up to well over the average for the area, and people have either already been through the home, or they think that there must be something wrong with it, or else why wouldn’t someone else have bought it by now?