Overpricing a home can have many ramifications for a home seller. It can limit the number of potential buyers who can afford your home, reduce showings and create an impression in the marketplace that the homeowners aren’t really serious about selling their home. Serious homeowners who overprice their home often get caught in the trap of price reduction after price reduction trying to catch up to the market.
Ginger Wilcox, at Trulia, has shared with us the seven deadly sins of overpricing your home, including the following:
- Appraisal Problems: Even if a buyer is willing to pay an inflated price, the home might not appraise for that price, which will likely kill the sale.
- No Showings: Buyers usually won’t bother looking at an overpriced home.
- Branding Problems: Once your home is branded, by agents or buyers, as overpriced, it is difficult to reignite interest.
- Selling the Competition: Over pricing makes your lower priced competition look like bargains.
- Stagnation: The longer your home sits on the market, the more people will start to wonder what is wrong with it and why it is stagnant.
- Tougher negotiations: Buyers tend to negotiate much harder on a home that has been on the market a long time or is priced higher than the competition.
- Lost Opportunities: You will lose a percentage of buyers who are outside of your price range. They are the ones who are looking in the price range the home will eventually sell for, but won’t see the home when it is overpriced.
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