Dangers of Overpricing Your Silicon Valley Home Too High
Overpricing a home is a common mistake among first-time home sellers. This will not only cause alienation on the market, but you will also decrease the likelihood of a sale by pricing your home too high. It is a common misconception among sellers that if they initially price their home high, they can always lower it later on. This is not always the case. The moment a new listing is put on the market, there is an initial frenzy of activity from prospective buyers concerning the property. This is a crucial time when both potential buyers and their trusted real estate agents will see it and take notice. If the home starts overpriced, it won’t take long for buyers to lose interest entirely. By the time the price sees a drop, the majority of prospective buyers are lost.
In this article, we will uncover common risks that you might run into and why the price must be right.
- Computer services listings are selected based on price range. If your home is priced too high, there is a big chance that it will not get selected by the computer as a property for an agent to show, but it will get overlooked entirely. For example, if a buyer is looking in the $150,000 price range and a listing agent searches that price, but your home is listed as $153,000, the computer will not highlight your property for that agent to show.
- If an agent should include your house as a prospective buy for their client, chances are, they won’t be interested in looking because they may think that the home is priced too high and is out of their limit.
- Buyers tend to shop by comparison. If a prospective buyer takes a look at your house and notes it to be too high, they might decide to make a bid on a more reasonably priced home.
- Appraisals are usually essential for new loans. Buyers typically realize that to get a loan to purchase your home, either the bank or mortgage company might have to agree to the value.
- Properties that are left on the market for long periods can become something called “shopworn.” Just like old merchandise in a department store, prospective buyers might have the misconception that something is wrong with the home and will only opt to buy at a discounted price.
- When overpricing your home, the salesperson’s attitude can be dampened, making it less likely for them to be willing to show your home to prospective buyers.
- Overpricing your home will lengthen the marketing time and result in a lower selling price than what might have otherwise been obtained.
Two Common Questions Prospective Buyers Ask When House Hunting
- What is the price?
- How long has the home been for sale?
If a house has been listed for sale for a long period, it is only common for buyers to wonder what is wrong with it. When the seller concedes to lower the price, there may be buyers out there who are willing to make an appointment to view it. If a buyer likes the house, an offer will be made based on how long it has been on the market for sale. This means for the seller that it will sell for less than if it had been priced accordingly from the beginning.
How to Sell an Overpriced Home
If you have listed your home but aren’t getting any showings or have had showings but no offers, you may be wondering if your house is overpriced. Prospective buyers will choose houses based on the price and location. Then, they will factor in the condition of the house and how it will meet their needs. When looking at houses, they might wonder if the price is worth it for the house. When a house is overpriced, they might move on to the next one and remove the sellers from the list. The only way to sell a house that has been sitting on the market is to adjust the price so that it is more competitive.
If you ask yourself if your house was priced too low, don’t fear. Sometimes, houses are intentionally priced lower than market value to sell quickly and at the highest price. Buyers might opt to flock to houses that seem like a good deal, increasing the chance of multiple offers, as well as competitive buyers vying for your property. This is how bidding wars begin and how some houses will end up selling for far more than the list price.
Bottom Line
It is always best to set the correct price to begin with. However, it is a common first-time home seller mistake, so if you don’t, then we recommend acting quickly and decisively to get it done right the second time around. Trust the help of a real estate professional at Homeowner Experience Real Estate to guide you in finding and settling down in the home of your dreams in the many beautiful suburban neighborhoods that make up Silicon Valley today.