Top 5 Reasons Not To Over Price Your Home
Excessive inventory. In recent years, the housing inventory has skyrocketed. With the downfall of the economy and the steady influx of short sales and foreclosures, there is now an abundance of homes available for sale. Today, supply exceeds demand. Overpricing your home in a market where supply exceeds demand is termed seller suicide! Why sabotage your own sale? Instead, price your home competitively giving you the best possible chance of getting it sold in a timely manner.
Buyer's Appraisal. In order for the buyer to qualify for a mortgage loan, the buyer's lender must appraise your home. If the appraised value is less than the sales price, the appraised value will equate to the maximum loan amount that the lender would be willing to approve. In order for the buyer to secure a mortgage loan, the sales price must not exceed the appraised value.
No traffic. The first week after placing your home on the market is a very crucial time. This is the time to capture interested buyers. If your home is overpriced, you are unlikely to receive any visitors. Buyers will preview other homes in your neighborhood but skip yours. To ensure a steady flow of traffic to your home, price your home competitively. Ultimately, this will increase your chances of receiving an offer from a ready, willing, and able buyer.
No offers. If your home is overpriced, you are unlikely to receive an offer as buyers are not willing to pay more for your home than it is worth. Rather, they will simply move on to the next property. It is imperative that you price your home in accordance with the current market value to increase the possibility of generating an offer.
No sale. Overpricing your home will ultimately end in no sale. As previously stated, buyers are unwilling to pay more for your home than its current market value. Therefore, overpricing your home will only help to ensure that your real estate transaction will not end in a successful sale.
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