Friday, November 2, 2007

Dangers of Overpricing Your Home

Many Sellers have the mistaken idea that they should price their home a little higher than they expect to get for the sale of their home. Please, do NOT fall into this trap! In today's market, homes need to be priced aggressively in order to attract ready, willing and able Buyers right away, in order to get the highest net return.

If you overprice your home, many Buyers won't even look at your home, thinking it is out of their price range.

Those Buyers who do look at your home are shopping by comparison, and looking at your home may convince them to make a bid on a different property.

Since an appraisal is often required when financing a property, it's futile to price a property for more than its worth. When the appraised value of your home comes in too low, it may jeopardize the sale of your home.

Properties left on the market for an extended period of time become "shopworn", causing many potential Buyers to believe there is something wrong with the property.

Overpricing tends to dampen the other real estate agents' attitudes, making your home less likely to be shown.

Overpricing lengthens market time and invariably results in a lower selling price than would have been otherwise obtained. When Sellers overprice their homes, especially in today's market, they often end up lowering the price of the home to attract more traffic to the home. They may have to lower the price of the house several times before they have it priced properly, to be competitive with other similar homes in their area. By letting the home sit on the market longer, they rob themselves of a higher net.

Market Time vs. Selling Price
0-4 weeks 98.1%
4-12 weeks 96.4%
13-24 weeks 94.9%
24+ weeks 91.1% or less

When it is time to sell your home, be sure to hire a qualified real estate agent and have them do a market analysis or price point for your home. Ask them questions, find out how they arrived at their sales price, look at other comparable homes that are for sale or that have sold recently. And above all, please, listen to your agent's recommendations. Price it right to get it sold!

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