The Dangers of Overpricing Your Home

Pricing a home for sale is one of the most strategic decisions home sellers must make. Of course you want to get the most possible money for your home. However there are definite dangers to overpricing a home or “testing the market” by starting with a bloated list price.

The best strategy for listing a St. Louis or St. Charles County home, or any property, is getting the price right the first time. We’d like to show you how proper list price saves time, money and creates better outcomes for the sellers. 

Timing 

You know the feeling of finding a brand new product that just hit the market? That feeling occurs in real estate too. Many eyes go to a property when it first comes on the market. If the home has an asking price that is beyond market range it can adversely affect the marketing of a property because marketing time is prolonged and initial marketing momentum is lost.

Percent of Buyers Who Will View a Property

The price of a property will definitely affect the number of potential buyers who will even view it. Online home search sites make it easy to filter out properties by price range in small increments. Homes priced higher than comparable homes for sale may not even filter into a homebuyer’s online search results.  Fewer buyers will be attracted and fewer offered received.

An overpriced property will likely attract “lookers” and will help competing houses look better by comparison. If the property does sell above true market value, it may not appraise, and the buyers may not be able to secure a loan. Finally, after many price reductions the property may eventually sell below market value.

Your First Offer is Often Your Best Offer

Seriously consider the first offer received. Just because an offer is received quickly doesn’t mean one should wait for a better offer from another buyer. A better buyer rarely appears. New buyers are waiting for the right home to come on the market and will come see your home. Dealers may consider a lower offer after the home has been on the market for a while.  Bottom feeders are attracted after multiple price reductions.

Properties priced correctly within market range generate more showings and offers, and sell in a shorter period of time. So how do you price a home accurately? Have an experienced local Realtor create a competitive market analysis for your home. You can’t depend on a computer-generated algorithm to know all the updates you’ve made to your home and how it compares to similar homes recently sold. Depend on a local Realtor that understands all these details.  If you do use a computer generated home value estimator, keep in mind that the results might not be completely accurate.

Thinking of listing a St. Louis or St. Charles County area home? Contact The Boehmer Team to create a competitive market analysis for your home. A Comparative Market Analysis considers similar properties that a) have sold in the recent past showing us what buyers in the market have actually paid for, b) properties similar to yours currently on the market that will be competing with yours for the attention of available buyers, and c) properties that failed to sell to understand what they did wrong and what can be done differently. An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price and an excellent opportunity for you to interview Realtors to work with. Contact The Boehmer Team for more information. 

How To Get The Best Price For Your Home

Determining how to correctly price a home for sale is one of the most important factors in selling a home. Statistics show that setting the correct market-determined price the first time will ultimately achieve the best sale price. To find the best price for a market an impartial evaluation of recent market an experienced REALTOR should perform activity.

Why shouldn’t I price my home high at the start then go lower if no bids come in?

Putting a home on the market at a price that is over market value in hopes that a buyer will fall in love with your home and be willing to pay anything is a strategy that rarely works. This type of buyer is extremely rare. Buyers generally want the most home they can get for as little money possible.

Pricing a home correctly the first time captures the momentum a new listing has in the marketplace.

New listings are exciting to homebuyers who have been looking and know what is on the market. If they see your property and find that it is overpriced for the market, they may mark it off their list and move on. Incorrectly priced properties will lose this new-listing excitement among buyers as time goes on.  Marketing time for your home will become prolonged as the initial marketing momentum is lost.

Pricing a home correctly will bring in more potential buyers.

If a home is overpriced compared to the market, fewer buyers will be attracted and fewer offers received. The property will attracts “lookers” and will help competing houses look better by comparison. If a property does sell above true market value, it may not appraise, and the buyers may not be able to secure a loan. Or, the property may eventually sell below market value due to market stagnation and price reductions. 

So how do you correctly price a home for sale?

An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price. Experienced REALTORs use a Comparative Market Analysis that takes the following into consideration:

·      Properties that have sold in the recent past show what buyers in the market have actually paid for properties similar to yours.

·      Properties currently on the market that will be competing with yours for the attention of available buyers.

·      Properties that failed to sell should be studied to understand why they did not sell as to avoid similar disappointment.

Pick a real estate agent based on reviews and experience, not how much they will initially price your home.

When trying to win your listing some agents may be tempted to offer an unrealistic initial sales price to get your business. These agents know full well they will have to reduce, reduce, reduce – the wrong strategy.   Speak with The Boehmer Team before listing your home. They are highly reviewed, awarded and experienced agents that know the market well. Even if they need to recommend repairs or staging services, the Boehmer Team knows how to get the most for your home sale.