It’s a temptation to price your home for more than you really expect to get. Selling a property for “top dollar” is every home owner’s dream. But does this typically occur in this day and age? Before the advent of the Internet, folks in the market for a new home drove around neighborhoods looking for FOR SALE signs and writing down the telephone numbers of the listing agents to contact for private showings. During that era, the list price of the home, although important, was not the deciding factor in requesting a property showing. In those days, the REALTOR® was the gateway to information about price, square footage, number of bedrooms, etc. Buyers could negotiate prices, but had a much less crystallized idea of the fair market value of a particular property. Essentially, buying a home tended to be based more on emotion and financial ability than on hard data. Times have definitely changed. In today’s cyber world, the proliferation of data available on the local real estate market, fair market value of properties, and competitive listings has transformed the home-buying process into a much more exact science. Before scheduling a property showing, buyers have already researched the listing on Internet sites such as Zillow, Trulia and REALTOR. Additionally, they most likely have identified the most attractive properties in terms of amenities and list price by comparing them to similar properties that have sold within the past 30 to 90 days. In a matter of seconds, Internet-savvy buyers can check property records Online to trace final sales prices of homes as compared to original list prices. They can find out how long the homes were on the market before selling and how many price reductions it took to bring about a sale. What this means for today’s sellers can be simply stated. Overpricing your home is at best counter-productive. At the worst it is risky and potentially damaging. Buyers and their agents know immediately if a home is overpriced from the onset and tend to “not waste their time” looking at homes with inflated prices in favor of those that are in line with the local real estate market as compared to comparable SOLDS within a five-mile radius within the past 60-90 days. Overpricing a home can be equated to the “kiss of death” for sellers wanting and/or needing a relative quick sale. Unrealistic prices sabotage the goal of obtaining the highest and best price in the shortest amount of time. Properties that linger on the market become stale and get little traffic. Buyers tend to dismiss homes with excessive days on market as either problematic properties or grossly overpriced. Even though sellers may consent to serial price reductions, this is risky business. Statistics show that discounting asking prices of homes several times actually brings about a lower sales price. On the other hand, pricing a home at fair market value at the beginning actually brings a more rapid at a more attractive price than the practice of discounting prices over a longer period of time. After all, time is money! At a Glance: 10 Reasons Why Overpricing Your Home Can Be Risky 1. Being dismissed by savvy buyers and their agents who know better 2. Extended time on market while property-related bills continue 3. Frustration and disappointment over fewer showings 4. Missing the first three weeks of excitement afforded to a new listing 5. Prolonging buyer’s ability to buy next home 6. Risking downturn in the real estate market 7. Risking hike in mortgage interest rates 8. Helping to sell the competition 9. Reduced exposure to the target market 10. Selling at a higher price, but having to deal with an appraisal cut
Posted on: Tue, 20 May 2014 01:23:14 +0000
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