Overpricing Your Home
Dangers of Overpricing
Miss the "Window of Opportunity"
The excitement is highest during the first few weeks a home is on the market. In essence, there is a window of opportunity where all the Realtors and buyers in the market are excited to see your "new" listing. If your home is overpriced during this critical window, it is difficult to generate that excitement again.
Perception of Being "Shopworn"
The perception once a home has been on the market for a period of time is that no one else wants it. It becomes "shopworn". Just like merchandise on a rack at a department store which has been looked over, buyers expect to pay less.
Takes Longer to Sell
It's a simple fact that homes priced above the going market take longer to sell. In fact, if you price your home too far above the market value, no amount of exposure and time will sell it.
Ultimately Sells for Less
Starting out high to test the market and then periodically reducing the price causes a property to become stale. By the time a home is finally reduced to the true market value it may be too aged to attract a full-price offer. Have you ever asked how long a property was on the market? If it had been quite some time, what conclusion did you draw?
Invalid Pricing Factors
You May Need More Equity than You Have
An owner's need for money does not increase the value of the house. Your need to pay off the credit cards, cover a home equity line, or even pay for a college education will not influence what a buyer is willing to pay for a home such as yours within your neighborhood.
You May Have Invested in Repairs and Improvements
Improvements should be made for enjoyment, not just for resale value. You cannot add an item to your home, use it, and then expect the buyer to pay full price for it. Repairs are a normal part of home ownership. Replacing a roof of putting in new carpet simply returns the home up to normal expectations.
Prices of Homes Where You are Moving
Prices are greatly influenced by location and demand. The exact same home is going to sell for much higher in Beverly Hills than in Salt Lake City. Just because you are moving to a higher priced area doesn't make your existing home worth more.
Refinance Appraisal
Appraisals, along with your good credit, are tools used by lenders to insure that there is enough security to give you a loan. Refinance appraisals often vary considerably from the price a buyer is actually willing to pay for a property when purchasing it.