What Happens if You Overprice Your Home?

Dated: 07/03/2019

Views: 500

We all know someone who's been trying to sell a house for... well, forever. The months have dragged on and there aren't any serious offers, but there's nothing wrong with the house - it's just that nobody seems to want to buy it.

In many cases, situations like these pop up because the home is improperly priced.

What Happens if You Overprice Your Home?

Overpricing your home is one of the worst mistakes you can make. In fact, it can prevent you from selling your home at all.

If you overprice your home, you run the risk of it sitting on the market for so long that you'll have to pull it down, wait, then re-list it later.

When your house is priced higher than it should be, buyers who would ordinarily buy it won't even see it. That's because the vast majority of homebuyers start their searches online - and they set the budget while they search so they won't look at houses outside their own price ranges.

The other negative: People who can afford the price you set will compare your house to others in the same price range and realize that they'll get more house for their money elsewhere.

The longer your home sits on the market, the less likely you are to sell it. Even if you lower the price later, it's a "stale" listing after a few months - and people who saw it when it was priced higher are likely to think there's something wrong with it because it's been on the market for so long.

Why Do Some People Overprice Their Homes?

It's completely understandable when people overprice their homes. In a lot of cases, this happens because the seller is attaching dollar signs to sentimental value. In other cases, it happens because the seller knows how much he or she paid for the home and how much it "should have" appreciated in value. Finally, it also happens when sellers take a guess at the price.

When a real estate agent sets a price for your home, it's based on several factors - including:

  • Homes that have recently sold in your neighborhood and nearby
  • Homes that were listed but never sold
  • Homes that sold

Your agent will use data from homes in your neighborhood and those nearby. Remember, home values can vary greatly, even within the span of just a few streets!

The bottom line is that your home is only worth what a buyer is willing to pay for it - and there are so many factors that go into a home's price, including its size and style, its location and proximity to amenities, and its age, that you need an expert to provide you with the right value.

Blog author image

Chip Boyer

Chip is the IT Manager for Alex MacWilliam Real Estate. He handles the technology needs of the company as well as helping agents in their day to day problem solving.....

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