The Cost Of Overpricing Your Northern Virginia Home-It Might Be More Than You Think

By
Real Estate Agent with Integrity Real Estate Group

The Cost of Overpricing Your NOVA HomeEarly this summer I met with a couple who wanted to sell their home.  They had two goals, sell as quickly as possible and maximize the amount of money they could take away from the sale. 

After touring the home with them and suggesting a few staging ideas, we sat down to discuss the comps.  Of course the shock of what the home might be worth and what they would like to be able to sell the house for was a bitter pill to swallow.  Since it was the height of the summer market my suggestion was to price the home at $250,000.  Follow up emails and calls went unanswered, a sure sign the listing was going to go to another agent.

As expected the home popped up on the market a few weeks later priced at over $40,000 more than my recommended price.  The first month passed and the first price reduction came.  Month 2 and the second price reduction and Month 3 brought the 3rd price reduction.  At the end of 90 days the home was still above my recommended price.   With a new agent came a new price.  Another month passed ane another price reduction brought the house to $250,000.  After 120 days the status changed to Under Contract.

Now I'm not a rocket scientist but when I suggest a list price it is based on market conditions, your neighborhood and the condition of your home. It isn't about any emotions you may have tied to your home and it isn't about testing the market to see if it might sell for more.  It's about giving you an honest evaluation of your home based on all of the information available.   For this family they lost the quick sale they said they were hoping for.  They spent 4 months keeping their house in showing condition and more importantly they continued to make mortgage payments whittling away at their goal to maximize the amount of money they could take away from the sale.

Every month your home sits on the market is another mortgage payment and a reduction on what you hoped to be able to take away from your home sale.  If you end up making 4 or 5 additional mortgage payments on your home the amount of your take-away quickly diminishes.  For this couple we are talking about 5 extra payments to get to settlement at a cost close to $10,000.  How would they have used that $10,000 had they listed their home at $250,000 at the beginning of the summer?  It's question only they can answer.

If you are thinking of listing your Northern Virginia home for sale consider all of the factors that go into getting a home sold.  An agent can do the best job in the world marketing your home but it is a rare buyer in today's market who will pay more than the market says the home is worth.  The cost of over-pricing your home is real.  If you are thinking of listing your Northern Virginia home for sale give Cindy Jones and CJ Realty Group a call at 703-346-2213.  Let's talk about the current market conditions and how to price your home to sell.

 

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                                   Real People*Real Lives*Real Estate

If you are interested in learning more about the Northern Virginia Real Estate market including Alexandria, Arlington, Fairfax and Prince William Counties give Cindy Jones and Integrity Real Estate Group a call at 703-346-2213.

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Integrity Real Estate Group
 
Real People*Real Life*Real Estate

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Gail Robinson 10/14/2011 03:01 PM
Topic:
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Location:
Virginia Prince William County Woodbridge
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Rainmaker
894,668
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Cindy - I know you just had a Feature, but I hit the Suggest button because I expect many agents have had this happen to them.  It's certainly happened to me.  I'm going to reblog!

Oct 14, 2011 02:59 PM #3
Rainmaker
765,058
Ritu Desai
Samson Properties - Ashburn, VA
Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949

Cindy just a simple fact about selling a home but yet so complex that it takes a seller either learn from their mistakes or understand and act smart about it.

Oct 14, 2011 03:01 PM #4
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Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

Great post, Cindy!  I just came over from Gail's reblog.   I think all of us have been there, done that.....

Oct 14, 2011 04:21 PM #5
Rainer
366,002
Scott Hayes
(512) 786-8300 - Austin, TX
Realty Austin, Broker Associate

Cindy,

 

We've all been there, only to see a homes price reduce,d to what we suggested months ( and in some cases a year) earlier. Makes you wonder if the buyers agent suggests a higher price, intending on coming down later

Oct 14, 2011 04:50 PM #6
Rainmaker
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Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Super post, Cindy.  Seems like it would make sense to keep stats on the ones you lost - your reco, actual price sold and time on market.  I'm betting that can help you close more deals.

Oct 15, 2011 12:18 AM #7
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

John-I'm sure this is a conversation that many of us have with sellers.  The right price will save an owner money which is hard concept to understand sometimes.

Oct 15, 2011 01:01 AM #8
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Mike-there isn't a single person who owns a home today who wouldn't like to defy the market.  I did it once last year but it took a buyer who said this is going to be my forever home and had cash to make it happen.

Oct 15, 2011 01:03 AM #9
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Gail-thanks for the thumbs up on the post.  I know I'm not the only agent who believes in telling prospects the truth about the market and hoping they will understand it's not personal it's about getting their home sold.

Oct 15, 2011 01:04 AM #10
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Ritu-it's tough to sit back and watch a property languish on the market when you are confident that the right price will get it sold.

Oct 15, 2011 01:05 AM #11
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Dagny-unfortunately the market speaks loudly and an overpriced home will rarely sell.

Oct 15, 2011 01:06 AM #12
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Scott-it's hard to know why one agent would suggest a price that is much higher than another.  We do think about the phrase "buying the listing" but it usually ends up being a lose/lose for both the seller and the agent.

Oct 15, 2011 01:15 AM #13
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Debbie-I watch the listings that end up going to another agent.  Price seems to be the #1 issue and most of the time they sell for very close to my recommended price months later.

Oct 15, 2011 01:16 AM #14
Rainer
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Coral Gundlach
Compass - Arlington, VA
Real Lives. Not Just Real Estate.

I know you are glad to be proven right, but what a shame those sellers "knew better" than you.   The type of agents who give honest advice like you (and me) will most likely not get hired by sellers like this.  They know more than you and would rather keep paying mortgage payments for months than go with the right price in the first place.

Oct 15, 2011 04:27 AM #15
Rainmaker
1,036,653
Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results

Cindy - If a property is unique sometimes we stretch a little ..... for your average this house is the same as the rest on the block type of home overpricing it usually ends up costing you  ...... the home becomes stale and then the bargain hunters who are not going to pay fair market value start sniffing around.

Oct 15, 2011 05:55 AM #16
Rainer
241,977
Justin Dibbs
Pearson Smith Realty - Ashburn, VA
REALTOR® - Ashburn Virginia Homes for Sale

I too have had this happen more than once.  Even happened with a friend who listed with 3 other agents before the house sold 8 months later at exactly the price I told him it would.  You are exactly right, overpricing your home costs the seller in the end.

Oct 15, 2011 10:27 AM #17
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Coral-not really glad to be proven right but wish more owners would be realistic and understand that the longer a home stays on the market the less likely they are to get the higher price/

Oct 16, 2011 05:27 AM #18
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Kathy-there is no doubt there are some properties that are hard to price.  I had an earth sheltered home listing once that I wasn't 100% sure how to come up with a comp.  But priced it competitively and it sold. 

Oct 16, 2011 05:28 AM #19
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Justin-it's hard to watch a home languish on the market when you know the right price and perhaps in some cases better presentation of the property are all that are needed to get it SOLD.

Oct 16, 2011 05:28 AM #20
Rainmaker
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Cheryl Ritchie
RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD
Southern Maryland 301-980-7566

Now that is some good straight talk that just needs to be said!

Oct 17, 2011 01:56 AM #21
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Cheryl-I'm not one to beat around the bush with my prospects and clients.

Oct 17, 2011 07:32 AM #22
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