"Victim of severe overpricing". I've seen this terminology used in several appraisals lately. My question is, who is the victim? The home, the seller or the REALTOR? How about all three! There is a very dramatic graphic I've used over the years to try to help seller's understand the hazards of overpricing. The trouble is, many people just don't believe that this includes their home! "I know I've seen a few homes that are overpriced, but I won't do that with mine, I know mine is worth more". This sad story has been told for many years, no matter what the market is like.
- The home either doesn't sell, or sells far below it's otherwise best price.
- The seller can't or won't understand why no one is showing their overpriced home. They become angry and distressed because the REALTOR "hasn't been showing my home". Buyers have no interest in looking at an overpriced home, the REALTOR can't drag people to show the home if they don't want to look. A buyer is looking at homes in a certain price range and they can spot an overpriced home better than you think.
- The REALTOR makes a decision to market the home, spending time and money, with little hope of reimbursement. Some REALTORS will take the listing, no matter what, just to benefit from email or phone leads asking about the home. I would argue that taking an overpriced listing, with the understanding that the home will likely not sell, or sell for much less than it's market value, is not in the seller's best interests.
The solution would seem simple, if not for all of the emotional baggage attached to home pricing. Basically, if you want to sell your home in today's market, don't be stuck on yesterday's price.
Gary Keller has captured this home pricing reality in a graph accompanied by his notes, for review.