fbpx

Overpricing Your Home-Never a Good Idea

Overpricing Your Home-An Even Worse Idea Today

Overpricing a home and hoping someone will still buy it is not a plan for success. The public is getting sharp, and they have a lot of data available to them.

Note: This post is one of a series of 8 on the house selling process. See them all on this pageBe sure to see the page on Proper Pricing of Home.

People overprice their homes all the time. There are a million excuses for doing so: “Let’s give that price a try…”, All we need is one buyer…, Somebody will love it as much as I do…”; on and on.

Overpricing Your Home - Never Good

Overpricing Your Home – Seldom a Good Idea

I’m not disputing that some homes are difficult to price. In selling our close-in neighborhoods I sell a lot of old homes that have been renovated to varying degrees. They are in neighborhoods that range from outstanding to rough around the edges. These are often difficult to price. Here I am talking about a house that is obviously overpriced compared to market value.

This is not a discussion of pricing strategy, just a discussion the realities involved in overpricing your home for sale. Some of the truths about overpricing are:

  1. You have wasted your biggest opportunity. A new house on the market gets a lot of immediate attention. You will get more viewers the first two weeks than you will the next 6 weeks. People have auto-searches for “New on the Market”.  If not priced correctly, you’ll be passed over by a big group of buyers.
  2. It’s just going to sit there; it’s not going to be shown. You are assuming that buyers and their Realtors are stupid and don’t know it’s overpriced. They do know and don’t want to waste their time.
  3. You are wasting valuable market time. Time passes. Buyers make offers on homes, but not yours. The perfect buyer may be making his decision now, and you are not even on his radar screen.
  4. You are making other Sellers happy. Your overpriced home makes theirs more attractive. You help sell your neighbor’s house instead of your own.
  5. Your house develops a stigma. People look for what’s new on the market, not for what’s old and stale. It doesn’t work to say “Let them make an offer and I’ll come down quite a bit”. The reality is they won’t make an offer…they just won’t. In fact, they won’t even see it, so they can’t make an offer.
  6. Appraisal? Let’s say a buyer comes out of the hills, sees your house and is willing to pay your inflated price. Will it appraise? No…the appraiser is not coming out of the hills. He knows an over-priced home when he sees it, and his job is to protect the lender from loaning too much.

So, these are just some random thoughts. It’s your house, so you can do what you want with it….but…have a back-up plan. if no showings, re-visit your pricing/marketing strategy and adjust immediately. Good luck…. and again, I’m happy to give advice Houston Heights Realtor Rich Martin
If you are working with a Realtor, get his thoughts on this. If you are selling on your own, For Sale by Owner, see other tips.

Mid 2014 update: It is a seller’s market, so you might get away with a little higher price now.  However, in a hot market if you don’t get an offer quickly, make adjustments quickly. Overpricing your home is still a tightrope. A reputation as an overpriced house or a “problem” house is difficult to overcome. In today’s market a well-priced home has a better chance of being bid up than it has for selling at an initial inflated house.  The market is more emotional now than in the past.