Regardless of whether the real estate market favors sellers or buyers, sellers are always looking for an upper hand, leading many to list their homes for a higher price. While higher list prices potentially mean more money at closing, it can lead to many downfalls if the home doesn’t sell.
Let’s dive into 4 disastrous downfalls if you overprice your home.
Price Reductions
Due to low inventory and buyer demand, when a new listing hits the market, showings roll in immediately, as long as it's priced right. So, if you’re not getting a lot of showings, you can assume your home is overpriced, meaning you’ll want to reduce the list price. Price reductions leave buyers wondering what is wrong with the home that the price dropped, and if you keep having to reduce it, that will continue to raise suspicions.
Longer Days On Market
The longer a home sits on the market, the less appealing it is to buyers. Much like price reductions, longer days on the market will also have buyers wondering what’s wrong with the home that it’s still on the market. In addition, the real estate market could shift to work against you, leading to a lower profit and money lost.
Lowball Offers
When homes are overpriced, buyers eventually start submitting lowball offers because they believe you’re desperate enough for an offer that you might accept. Low offers are frustrating for sellers who think their home is worth more, and they also mean sellers will net less when they close.
Home Won’t Appraise
You might get lucky and receive an offer for the price you listed your home for, but you still need to get to the closing table. When it’s time to get an appraisal, you might not be able to find comparable homes to validate your price, and the lender might not loan the money to the buyer for the home, causing everything to fall apart, and you have to start from scratch.
Overpricing your home is extremely risky and can be more detrimental than you think. If you have questions about your home or what it’s worth, reach out to us today! We’re always here to help.
Posted by Shane White on
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