What Causes People to Overprice Their Homes?
There are many reasons why an overpriced home won't sell or may even sell for a lower price than a home that was priced competitively. So why do people still overprice their homes when placing them on the market? There can be a few reasons, many of which center around the homeowner's expectations and home expenses. Here are a few common reasons homeowners overprice their homes, so sellers can be aware of common pricing mistakes.
The Homeowners Have Over-Improved the Home
Improvements should be made for enjoyment, not just for resale. You cannot add an item to a home, select it to your style, use it and then expect a buyer to pay the original cost.
Financial Need of the Homeowner
An owner’s need for money does not increase the value of the home nor does a buyer care about how much you need to walk away with.
The Homeowner is Buying In A Higher-Priced Area
Values are location specific. High values in the destination, the location to which you are moving, do not increase the value of the home you are selling.
The Home Had a High Original Purchase Price
Chances are you paid market value for your home and the market may have changed. It is not that you paid too much but rather, that the market has since experienced significant change. This is not a reason to ask a higher price.
There is a Lack Of Factual Data
Base your opinion of value on recent documented sale prices. Prices formed around perceived value according to the bias of the homeowner are more likely to skew too high and make the home less competitive.
The Homeowners Want Bargaining Room
Buyers may offer low, but they will do that at any price. It is easier to negotiate up to fair market value than to an inflated price.
The Homeowners Aren't Motivated to Sell
You are not really motivated to move but, if you got the right price, you would move. It is important to price correctly to preserve your marketing opportunities when and if the move becomes urgent.
When you price your home right, it will sell more quickly and for a better price than if you priced it high. Let Justin Havre at RE/MAX First help you price your home to get the maximum sales price for your home and help ensure your home won't languish on the market when you try to sell.