Overpricing real estate is one of the most common
mistakes made by sellers. Most of the time, this strategic miscalculation is a result of
one of these common errors in thinking.
Price Based on Amount Invested
Sellers often take a certain price position based on the
amount of money that they have invested in their home. They might take the purchase price,
add to that the dollars that they have since spent on improvements, and finally, add a
handsome return on their investment. This strategy is flawed in that the amount of money
you have invested in your home has no relation to its current market value.
Price Based on What You Need
Some seller's determine an asking price based on what they
want, or perhaps need from the sale to achieve their future objectives. Perhaps they are
moving to a market where homes are more expensive. Maybe they have a certain "maximum
mortgage objective" for their next home. Sellers should be aware that the price of
real estate in their destination market does not affect the value of their home in their
current market area.
I've Got Lots of Time to Sell
Often times, sellers misunderstand the fact that more time
on the market tends to work against them, instead of for them. The fact is, that typically
things get worse over time instead of better. Consider this. Your property has been on the
market for three months, priced above market value. It's already been shown to almost
every buyer that could possibly have an interest in buying it. They've all said,
"thanks, but no thanks." What are the chances that someone is going to come
along and agree to pay too much for a home that nobody else seems to want? Yes, it
happens, but people win the lottery too.
Hiring the Highest Bidder
A prudent home seller will talk to more than one REALTORŪ
when they are considering a sale of real estate. In fact, we recommend that you speak with
at least three real estate professionals before you put your home on the market. Some
sellers are tempted to list the home with the agent that comes back with the highest
suggested list price. BEWARE! Real estate agents are not in the business of buying homes.
They sell them. Just because one agent states that your home should bring a certain
figure, doesn't mean it will. Some real estate agents might even purposefully over
estimate your home's value to secure a listing contract. After that, they begin to work
you for a price reduction. In the end, they've sacrificed your most valuable marketing
time and almost certainly cost you money. Choose your agent based on the services that
they are prepared to provide you. It's these things that will be helpful in getting a top
They Can Always Make An Offer
Some sellers feel that buyers can simply make them an offer
if they feel the price is too high. In fact, buyers seldom express interest in writing
offers on overpriced homes. It ties up their deposit funds and is usually just a hassle
attempting to negotiate on overpriced homes.