Even as recently as last year, homes were selling quickly and getting multiple offers well over their asking price. It felt like sellers could name any price and still have buyers lined up at the door. But today’s housing market is different. Buyers are getting more selective now that inventory has grown. Homes are sitting a little longer. And more sellers are having to cut their prices.
So, how do you still come out on top? It all starts with one thing, pricing your house right from the start. Today, that matters more than ever – and it can make or break your sale.
The Hidden Pitfalls of Overpricing Your Home: Why a Realistic Listing Price Matters
Selling a home is an exciting journey, but it’s also one that requires careful strategy—especially when it comes to pricing. Every seller wants to get the best possible price, but setting the bar too high can have unintended consequences. Let’s explore why overpricing your home might actually cost you in the long run.
The Buyer Can Just Make an Offer
Sure, the buyer can just make an offer - even if your home is overpriced. The problem is that today’s buyers are savvy. They have access to market data, comparable sales, and automated valuation tools at their fingertips. If your home is priced significantly higher than similar properties in the area, it may not even make it onto their shortlist. Instead of generating excitement, an overpriced home might cause buyers to scroll past, assuming it’s out of reach—or simply not worth their time - or worst of all, that you are an unreasonable or delusional seller that they should avoid at all costs. If the buyer doesn't even put your home on their list, how are they going to know that it is a home worth offering on? If they don't even see it, they certainly won't offer on it!
The Danger of Sitting on the Market
Homes that linger on the market for too long often raise red flags. Buyers may wonder if there’s something wrong with the property or assume the seller is difficult to negotiate with. The longer a home remains unsold, the more likely it is that buyers will start making lowball offers, expecting desperation to kick in.
Appraisal and Financing Issues
Even if you find a buyer willing to pay a premium price, their lender will require an appraisal. If the appraisal comes in lower than the purchase price, the buyer may need to cover the difference out-of-pocket, renegotiate, or walk away altogether. Overpricing can create unnecessary obstacles that derail the sale late in the process.
Price Reductions Can Send the Wrong Message
If a home is overpriced and doesn’t attract offers, sellers often resort to price reductions. While lowering the price seems logical, repeated cuts can make the property appear undesirable. Buyers may start wondering, “Why hasn’t this home sold yet?” and assume there’s a hidden issue.
Competitive Pricing Leads to Stronger Offers
On the flip side, a well-priced home generates interest and competition. When buyers feel a home is fairly valued, they’re more likely to submit strong offers, sometimes even above asking price. A realistic price encourages engagement, showings, and ultimately, a faster sale.
How to Price Your Home Right
Working with a knowledgeable real estate agent who understands market trends is key. They can provide a comparative market analysis (CMA) to determine the optimal listing price. It’s also wise to consider factors like location, condition, and buyer demand. A strategic price point will help your home sell efficiently while maximizing your return.
Many Sellers are Overpricing
81% of home sellers believe they’ll get their asking price or more. But the actual sales data shows there’s a growing gap between what sellers expect and what buyers are actually willing to pay. In fact, 44% of recently sold homes went for less than the asking price. And 1 in 3 sellers had to cut their price at least once before the home sold. It’s a sign that expectations may be a little out of step with today’s reality.
Check out the graph below. It uses data from Redfin to show that asking prices (blue line) are higher than actual sales prices (green line) by a wider and wider margin:
This tells you something obvious but important: Not all buyers are willing to pay what many sellers are asking. That doesn't mean that you can't sell for a great price- but it does mean that you need to start with a price that reflects what people are willing to pay in today's market. Overpricing your home might seem like a good way to test the market, but it often backfires. Buyers are informed, and overpriced listings tend to lose momentum quickly. A competitive price can lead to quicker sales, better offers, and a smoother transaction. So before listing, take the time to price your home thoughtfully—it can make all the difference.
Selling your home is a big step, and the right pricing strategy can set you up for success. It is more important now than in the last few years to get the initial list price right from the start. If you are thinking of selling your home, let's talk! Here is a link to my seller's guide, which you might find helpful. I can be reached at 240-401-5577 or email me at lise@lisehowe.com.
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