Pricing your home correctly is the single most important aspect of a timely home sale. Unfortunately, it doesn’t really matter what YOU think your home is worth; the only thing that matters is what someone else is willing to pay. Things like the original purchase price, home improvements you made, your own need for money, personal attachment, and online home estimates have little to do with the current market.
If you overprice your home, or disregard your Realtors advice about the optimal price of your home, you run a lot of risks.
- You will diminish the excitement a new listing generates. Most buyer activity happens within the first 30 days that a property is listed, and generally this is when the best and highest offers come in.
- You lose qualified prospects. Serious buyers who might be interested in your property won’t be able to make an offer because this property won’t show up in their searches. Why would they search for properties they can’t afford?
- You help other homes sell first. If your price is too high, it may be used to demonstrate the value of other, more competitively priced properties. You should enter the market in a position to attract buyers, not drive them away.
- Your home may become stale. The longer it sits, the more prospective buyers will think something is wrong, especially if you begin to lower the price. A house takes on a reputation and you may have to settle for less than market value if you initially price it too high.
- You can create appraisal problems. Even if you do get an offer, the buyer’s lender than orders an appraisal to determine if the home’s value matches the loan amount. If they decide that the home is worth less than the listing price, the contract can fall apart.
- And on that note, it’s always better to have options. Even if you have one offer, the contract can fall apart because of a whole host of other reasons. If you are overpriced, you may not have multiple offers as insurance.