4 Reasons Why Overpricing Hurts

Although most agents want to ensure that they get top dollar for their client's home, since it means a higher commission, selling your house to the highest bidder isn't just about listing it at your desired price. Below are the top reasons why overpricing your house can lead to the opposite effect of what you want, often selling for below your target price.

You're Going To STAND Out

And we don't mean in a good way. Often times, when buyers have been researching homes for a few days they start to build an idea of what your home's value should be. When they see that your asking price is much higher than comparables in the area, that will automatically set off alarm bells in their head and lead to questions such as: "I wonder why this is priced too high? Is the seller arrogant or just stubborn?" You want to avoid buyers asking questions like this because it means they'll be less inclined to put in offers.

Missing Potential Buyers

Pricing a home appropriately is crucial because it sets the tone for new buyers that might have a budget range they're trying to stay within. For example, if most homes in your area are selling for $500k, then most buyers will set a search criteria to exclude options above $500k as they look at homes — if you price your listing much higher than this threshold, then you're missing out on the target buyer pool.

Longer To Sell

This almost goes without saying, but the higher you overprice your home: the longer it will take to sell. The amount of time your house sits on the market is a self-perpetuating cycle: the more time it sits on the market, the more buyers think something is wrong with it and will avoid it, and leading to the house sitting on the market for longer.

Buyers Will Be Turned Off

Let's say you're lucky enough to get an offer on your home even after pricing it well over market, there's still the negotiations process to go through when you're under contract. If you've already stuck the buyer with an above-market sales price, they're less likely to be open to negotiating on any other terms of the deal (e.g. closing date, contingencies, financing, etc.) if you need some leeway down the line.

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This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.