Don’t fall into the Overpricing Trap

Don’t fall into the Overpricing Trap

Pricing strategy is one of the most important elements in selling real estate. As our market is changing, we’re seeing an increase in inventory and a decrease in multiple offers and overbidding situations.

Even in some of the hottest Real Estate Markets, we’re seeing a steady increase in Days on Market. That’s why it’s crucial to avoid falling into the overpricing trap that many home sellers may be finding themselves in.

There’s a difference between “How much can I list my house for?” and “How much can I sell my house for?

To get top dollar, it’s essential to price a property accurately for the current marketplace. The reason is simple.

Virtually all buyers search for properties online before scheduling time to see a listing in person. That means these buyers know in great detail what comparable homes are listed for in your area. If you overprice the property, you risk having your home sit on the market with few buyers who will consider viewing (let alone putting an offer on) a home that is clearly more expensive than comparable homes.

This lack of interest can lead to a compounding issue. If your home is listed for a longer than average time, you will have created a perception problem. Buyers often assume that there is something wrong with a property that’s been sitting on the market for too long.

When you fall into the overpricing trap, corrections can be costly. To generate enough interest in your property, you may be required to drop the price below what would have originally been considered market value.

Instead of giving yourself room to negotiate with sellers, you will have set yourself up for selling a property under market value.

Another thing to take into consideration is an appraisal. If you accept an offer from a buyer who is using a bank loan to make the purchase, they will be required to get a satisfactory appraisal. If your property is overpriced, you run the risk of the appraisal not coming in at value. If the property doesn’t come in value, there are things that can be done, however, you should understand What happens during the home appraisal, and what can be done if an appraisal comes in below value.

To learn how to best price your house strategically, keep in mind the following factors:

• Inventory: The basics of supply and demand apply, If your home is one of 20 for sale in your neighborhood, you’ll have a hard time getting the price you want since supply outweighs demand. But, if it’s a hot market and you’re one of just a few homes available in your area, you may be able to get your asking price, or even higher.

Know the market your in:

• • • Buyer’s market: In a buyer’s market, you need to be priced slightly lower than the competition, because there are more homes for sale than there are buyers in the market.
  • • Seller’s market: In a seller’s market, you can move to your price based on a comparable sale, since inventory is limited and buyers are competing for fewer homes.  
  • Neutral market: In a neutral real estate market, there’s a good balance between the number of buyers and the number of homes for sale. In this market, you’ll want to keep an eye on nearby comparables to make sure your pricing is similar.

• Seasonality: Weather and Seasons play a role in home sales. As you’ve probably come to notice, Spring tends to be the time when most people put their houses on the market, adding to an increase in inventory. Fall is another great time to list your house,  as most people are back in town from summer vacations, and there is a decrease in inventory. Winter is the slowest season, not only because of bad weather but because people are busy with the holiday season.

Know the comparable sales, Look for home sales in the past three months. Appraisers look at comparable homes sold in the last three months.

Put yourself in the buyer’s shoes, It’s hard to put aside your emotional attachment to your home, but when selling your home, it’s a must. Look around at what else is selling around the same price. Objectively, are these homes worth more or less than yours?

To get top dollar, it’s essential to price a property accurately for the current marketplace.

When you are ready to sell, I’ll be happy to stop by to evaluate your property. Together we will price it to sell for top dollar, in the shortest amount of time, with the least amount of inconvenience to you.

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