Tuesday, March 20, 2012
The Pitfalls to Overpricing Your Home
(Hatteras Island, N.C.) Buyers today are primarily looking for location, condition, and price in the properties that they purchase. Since the location is fixed, and rental homes are usually in good condition, the variable over which a seller has the most control when listing their home for sale is the asking price. Traditionally, the best measures of a home's value are the price at which comparable properties have been sold and those that are under contract. We also study the prices at which similar properties are presently being offered for sale to get some feel for the competition. Despite the market indicators that lead us to a determination of the probable sale price for the home that is being evaluated, some homeowners choose to "overprice" their properties.
We hear a variety of reasons for overpricing including - "My home is unique, and market trends have no relevance"; "I recently spent a lot of money on a new heat pump or a new roof, and I want to recover those costs"; and, "I need to get this amount of money out of the sale." While each of these comments may have relevance to the seller, if they influence the objectivity of the pricing analysis and result in a listing price that is higher than current market conditions warrant, then, serious consequences for the marketing of the property and its eventual sale will occur.
Here are a few of the major dangers of overpricing:
·The property will not sell because it is priced above equivalent homes that are for sale.
·The overpriced property will help to sell other competitively priced homes.
·The number of showings will be dramatically reduced.
·The home will become "shop worn" after being on the market for an extended period of time without selling.
·The effectiveness of advertising is reduced.
·The property may not appraise in the unlikely event that it sells.
·An unrealistic price can discourage qualified buyers from making offers.
·Ultimately, the seller may end up accepting a lower price than they could have received if they had priced their home properly at the outset.
The bottom line is that in a market like the one that we are experiencing, price is a seller's most effective marketing tool. The pricing recommendation that you receive from our professional brokers is based on a belief that your financial interests will be best served by pricing your home as competitively as possible and attempting to sell it as quickly as current market conditions will allow, rather than pricing it higher and then chasing the market downward.
If you or someone you know has considered selling a home or lot that you own, take the first step and contact the Outer Beaches Sales Group. One of our experienced, full-time brokers will work closely with you to develop a realistic listing price and a comprehensive marketing plan for your property. We may be reached by phone at 800.627.6627 or by e-mail at firstname.lastname@example.org.
Posted by OBX Outfitters at 2:07 PM