Wednesday, June 5, 2019 / by Laurie Zuccaro
THE PITFALLS OF OVERPRICING
The Result of Overpricing
Many Sellers believe that it is okay if they price their home high initially, they can always lower it later. Is this a wise strategy? Often, when a home is priced too high, it experiences little activity. Although the Seller may gradually lower the price closer to market value, by that time it has most likely been for sale for too long, and some buyers will be wary and may even reject the property.
Occasionally, the price may be dropped to below market value because the Seller has run out of time. When this happens, the property sells for less than it is worth.
Getting to Know Your Market
A comparative market analysis prepared by your realtor, is an indicator of what today’s Buyers are willing to pay for a similar type or comparable home. The purpose of the report is to compare the market activity of homes similar to yours, usually in your immediate neighbourhood. Those that have recently sold represent what Buyers are prepared to pay. The homes currently listed for sale represent the price Sellers hope to obtain. And those listings that have expired are generally overpriced, poorly marketed or have other issues.
Missing the Right Buyer
You may think that interested Buyers “can always put in an offer”, but if the home is overpriced, potential buyers looking in a lower price range will never see it. Those who can afford a home at your asking price will soon recognize that they can get better value elsewhere.
The Importance of Early Activity
As soon as a home comes on the market, there is a flurry of activity surrounding it. This is the critical time when a Realtor and potential Buyers sit up and take notice. If the home is overpriced, it doesn’t take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.
Agree on a Marketing Plan
Your property is not something you sell everyday. In fact, for many people it is their largest asset. A house is very complex to market and the process needs to be well organized. To do the job properly, a plan is needed. Therefore, choose an Agent that you trust to help you make informed decisions that will save you a significant amount money and time.