The Dangers of Overpricing Your Home
In today’s ask the agent segment, we are talking about pricing. We have been getting a lot of questions from sellers recently along the lines of if they should try and sell their home for tens of thousands of dollars more since they are not in a rush to sell. Unfortunately, that strategy usually fails. Overpricing typically does not work and there are a number of reasons why.
The number one reason being that it does not create a fear of loss amongst buyers.
Buyers in our market are very well educated; they know what other homes sell for, and so do their agents. When a home is overpriced, they are not compelled to write an offer. The other thing it does is it limits the amount of people that actually see your home. You are shrinking the potential buyer pool and you are not creating fear of loss. You are creating this question in the buyer’s mind “I wonder how much I can get this under list price” instead of “What do I need to do to not lose this home”. You are limiting your buyer pool, your not creating a fear of loss, and you’re creating questions in their mind of how big of a discount they can get.
The end result is that your home sits on the market for several weeks, if not months.
The sellers typically have to do multiple price reductions, causing the buyers to think there is something wrong with the house. After multiple price reductions, the home eventually sells for less than it would have if it was priced appropriately in the first place.
We have actually seen this trend in Arlington where homes that are priced right will sell in a week or 2 and homes that are even just a little bit too high will sit on the market for weeks or months. We know from both representing sellers, and being sellers ourselves, that is very frustrating. We strive for this to not happen to our clients and are very proud that our team sells home in less time than the average agent and for 2-3% higher than the average list price.
As always, if you have questions on this topic, or have a question you’d like to ask for our next ask the agent segment, feel free to give us a call or shoot us an email.