Please read the first half of this post first.
Overpricing can cost you
- … in Time
- An overpriced home may see some activity in the form of showings, but when it offers less than others at the same price and/or offers the same as what others currently selling for less, it’s not going to sell. And the calendar rolls on.
- Weeks can turn into months, and the choice to overprice the home now has it looking very stale, even if there’s “nothing wrong with it.”
- Let’s say two next-door neighbors with equivalent homes are both on the market. One has been on for 5 days, the other for 193. Without knowing anything else about the homes, what thoughts run through your head?
- … in Effort
- Overpriced homes will still get some showing requests. And each of those requests means your effort in getting the home cleaned and ready.
- As the time ticks on, each time you have a showing at the inflated price, your frustration level grows and you view the whole ritual as a worthless hassle. Not the approach that is conducive to getting the most for a home.
- … in Money
- Oh right, and there’s the little thing called $$$ that may be important to you.
- Pricing too high will mean that you will eventually sell the home for less than you could have, which means less money in your pocket to buy your next home or whatever other purposes you could use it for.
- Money is really what pricing is all about. And the best agent is the one who knows how to analyze your home in detail, weigh all that it offers against the market information, decipher the changing dynamics in the market — and suggests the price that will help you achieve the top selling price and most favorable terms.
Regardless of price, your home will help to create a sale — the question is, will it be yours or someone else’s? If a longer market time and being overpriced lead to a higher sales price, I’d be all for it. The fact is that they don’t, and they never will.
Just like the old saying…
“What if I underprice it?” you may be thinking. I get it. If that does happen (which is rare, but it does), the market will let you know immediately in the form of numerous showing requests and a boatload of offers. In that event, the offer prices are automatically pushed upwards to meet the demand for the property, ultimately selling for the most the market will bear. At that point, the listing price is an afterthought.
There’s an old tried-and-true saying in real estate: “You can overprice a home, but you can’t underprice it.” I never recommend underpricing a home, just being precise with it after the hours of thorough analysis I’ve personally put into it. If a home is underpriced, the market will still find a way to pay the most for the home — but not the other way around.
Indeed you would be giving up some things if you price your home where you should: the unnecessary time spent keeping the home in ready-to-show condition; the overwhelming feelings of frustration and annoyance; the second-guessing you will be making of yourself; and, of course, the lost hard-earned money that you would have been throwing away.