What’s the number one piece of advice real estate agents give to sellers? “If you overprice your home, it will take longer to sell.” Do seller’s listen? Not always. Some sellers overprice their homes in hopes of making a higher profit despite the market value. Other reasons sellers overprice their homes are:
- They feel they have to make a huge profit
- They don't want to bring money to closing
- They feel they have a superior home
- They want to recoup money invested in the home for improvements and repairs
- They want the extra money to buy a bigger, more expensive home
- They want to pay off debts
- They want the extra money for some type of financial goal
- They think real estate agents can get it sold for more if they just work harder
In case you didn’t notice, none of the reasons had anything to do with the current market value.
Zillow.com once did a study that sellers usually base their asking price on their original purchase price. In a way that makes sense, but in reality the current market value plays a huge role in pricing houses, not the original purchase price.
There’s a chance that if you over price your home it will sit on the market for a long time. You may price it outside of the average buyer’s price range, missing out on a slew of potential buyers.
Some sellers will say they set the asking price high so there is some wiggle room to negotiate with a potential buyer and still make a profit. This is also not a really good strategy. As stated before, you can price yourself out of the average buyer’s price range, get less showings and if you decide to reduce the price after a certain amount of time, buyers may think there is something wrong with the property.
If you price your house according to market value, you have a better chance to getting your full asking price.
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