When it comes to getting the most money for your home with the least headaches in the shortest amount of time, nothing can stop that process faster than overpricing. In fact, it's the number one reason homes don't sell.
As a real estate professional committed to happy clients who are eager to get the most from their investment, sharing this must know information with potential sellers is on the top of my list.
Timing is everything
Very often a seller asks, "We can always come down later-- right?" Historically when your house goes on the market, the greatest potential for buyer traffic is in the first 30 days. By pricing it high with the intention of dropping the price later, you are completely bypassing your best candidates for buyers.
Showing Shutout
Agents have an obligation to do what is best for their clients. Clearly, showing overpriced listings does not fall into that criterion. With inventory high, agents will undoubtedly choose to show properties that are within their buyers price range and that meet the current fair market value.
Benefits of Competition
Unfortunately, when a home is overpriced, it not only sits o the market but acts as a selling point for the other market-priced homes. It is a cue to buyers to say, "I can get the same house for less!"
Lender Trouble
Even if an agent agrees to list your home too high, and even if you were to find a buyer willing to pay more... and these are both big IF's... today's lenders are extraordinarily cautious now. They base their loans on accurate appraisals and appraisers must base their price on comparable properties that have sold.
Time On Market
Overpriced homes will simply sit on the market. Unfortunately, extended time on market forces the question in a buyer's mind of the possible bigger problems looming within the walls of the property. Put yourself in a buyer's shoes. What's the first two things a buyers asks when they consider a property? What's the price and how long has it been on the market?
Lower Proceeds
Unfortunately, when a home starts its listing life overpriced, it almost always sells for less than the market value. With few buyers to choose from, zero leverage because of time on market, too high an asking prices and carrying costs to maintain the property, most sellers find themselves getting the least from their investment rather than the most.