If you overprice your house, you will lose money!

As Realtors, we talk about overpricing a lot.  An overpriced house is a lonely house.  It soon becomes stigmatized and ignored by most Realtors.  If it receives low offers that are countered by an insulted seller it will also acquire a reputation as a house that is not worth the trouble.

I had a seller in 2010 that wanted to list his house just slightly too high.  It was about 10% over market, and we had discussed a system of moving it down over a designated time.  That never happened, of course.  It was the last house I ever overpriced.

It was at the time when the market was just starting to experience a new wave of price weakness.  If I had run comps 45 days after list, the list price would have been lower.  Anyway, I received an offer within the first two weeks at 94% of list.  He countered twice and lost the sale.  It was over $500.

Nearly a year later I still had the listing, and it was still overpriced.  The market had fallen even further.  I negotiated with the seller to lower the price, and I committed to drop my commission 1%.  At that point, I just wanted to get rid of it. 

Again, he received an offer within days of the new price, and again he countered with an unrealistic counter.  The buyer walked without a counter.  When the listing came up for renewal, I declined.  It was re-listed 3 months later at $100 less than my previous list. 

It finally received a contract that was below my second lower contract.  The point of this blog is this, if you insist on overpricing your property when good comp information shows that properties are not selling at that price you will ultimately get less.

This seller lost $32,000 by continuing to believe that a buyer was willing to pay 30% more for his house than the current market comps.  An overpriced house that lingers on the market will ultimately cost the seller more than if he had priced it right to begin with. 

It happens everyday in this industry, and yet, good agents still have a hard time convincing a seller that an overpriced house is a lonely house.  The best way to help them, is to not help them.  Walk away and save yourself the frustration of seeing the next agent sell the house for the price you recommended.  An overpriced house often brings less than a well priced house.

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Give me a call for all your real estate needs, and let's make something amazing happen. 

Mike Cooper @ Cornerstone Business Group, Inc., 888-722-6029

Real Estate Sales and Property Management

 

(Disclaimer:  All grammatical mistakes, punctuation breakdowns and misspellings are purely for your amusement and entertainment.  Feel free to cackle.)