In today’s housing market, many home sellers are making a critical mistake: overpricing their houses. This standard error can lead to a home sitting on the market for a long without any offers. When that happens, the homeowner may drop the asking price to re-ignite buyer interest.
Data from Realtor.com shows the number of homeowners realizing this mistake and doing a price reduction is climbing (see graph below):
If you’re considering making a move yourself, here’s what you need to know. The best way to avoid making a costly mistake is to work with a trusted real estate agent to find the right price. Here’s a look at what’s at stake if you don’t.
Not Paying Attention To Current Market Conditions
Understanding current market conditions is key to accurate pricing. You don’t want to set your asking price based on what happened during the pandemic. The market has moderated a lot since then, so aligning your price with today’s reality is far better.
Real estate agents stay updated on market trends and how they impact the pricing strategy for your house.
Pricing It Based on What You Want To Make (Not What It’s Worth)
Another misstep is pricing it based on what you want to make on the sale and not necessarily current market value. You may see other homes in your neighborhood selling for top dollar, and assume yours can do the same. However, you may not consider differences in size, condition, and features. For example, maybe that other house is waterfront or has a finished basement.
To sum it up, Bankrate explains:
“How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.”
An agent will perform a comparative market analysis (CMA) to compare your house with similar properties and accurately assess its price.
Pricing High to Leave Room for Negotiation
Another common misguided strategy is to price your house high purposely so you have more room to negotiate during the sale. But this can backfire. A price that seems too high often deters potential buyers from even considering the home. So, rather than leaving room for negotiation, you’ll be turning buyers away.
U.S. News Real Estate explains:
“You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you’ve overpriced your home, chances are you’ll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.”
An agent can help you set a fair price that attracts buyers and encourages more competitive offers.
Bottom Line
Overpricing your home can have serious consequences. A knowledgeable real estate agent brings an objective perspective, in-depth market knowledge, and a strategic approach to pricing.
Let’s connect with KM Realty Group LLC, Chicago, Illinois, so you can avoid making a pricing mistake that’ll cost you.
