Contrary to popular belief, when you are selling your home, its value is determined by one thing – what a qualified buyer is willing to pay for it.
Sure, many sellers will argue that their home has an insurance replacement value, or an appraised value, or a tax assessed value, but unless your insurance agent, your banker, or your tax assessor is willing to write you a check for the home, guess what? None of that matters. A home without a buyer has no value in the marketplace. So, here’s the secret to pricing your home to sell: It’s not what you think the home is worth that matters, it’s what a reasonable buyer will think your home is worth that will ultimately determine whether your home will sell.
The Seven Deadly Sins of Overpricing Your Home:
1 -Even if you do find a buyer who is willing to pay an inflated price, the fact is that over 90 percent of buyers use some kind of financing to pay for their home purchase. If your home isn’t appraised for the purchase price, the sale is likely to fail.
2- Today’s sophisticated home buyers are well educated about the real estate market. If your home is overpriced, they won’t bother looking at it, let alone make you an offer.
3- When a new listing hits the market, every agent quickly checks the property out to see if it’s a good fit for his clients. If your home is branded as “overpriced”, reigniting interest may require drastic measures.
4- Overpricing helps your competition. How? You make their lower price seem like a bargain.
5- The longer your home sits on the market, the more likely it is to become stigmatized or stale. Have you ever seen a property that seems to be perpetually for sale? Do you ever wonder: What’s wrong with that house?
6- Buyers who do view your home may negotiate harder because the home has been on the market for a longer period of time.
7- You will lose a percentage of buyers who are outside of your price point. These are buyers who are looking in the price range that the home will eventually sell for, but who don’t see the home because your price is above their present budget.
Believe it or not, there are actually three prices for every home. What the buyer would love to pay; What the seller would love to get; and, what the home will eventually sell for.