Why You Shouldn't Overprice Your Home
I recently had a seller ask if we could list their home 30k over my recommended list price. This is a very common question for sellers, and honestly, it makes a lot of sense. In today's market, there's a lot of opportunity for a seller to run away with bags full of money; however, if the seller proposes an inflated price that does not reflect the products true market value, they're likely to walk away the loser. Here's why:
You Only Have One Shot
Listing your home takes a lot of preperation. From purging and cleaning, to painting and staging; the prep work can be a lot. Once all the preperation is done, photo and video marketing is completed to help promote the listing online, and in printed marketing. This makes up a large part of a realtors marketing strategy to promote your home, and present it at its finest - BUT, if your agent can't present the home with a price that is fair market value, the time and money spent on marketing is for nothing. Your home is only presented to the public once, so you need to put your best foot forward. Price is a major factor in the marketing of your home, and plays a key role in the success of the sale.
Buyers Aren't Idiots
Just like a seller is looking to make the most money on the sale of their home; a buyer is looking to get a deal. In a market like we're experiencing, buyers know its difficult to find a good deal; however, they're still very savvy. Buyers have access to a lot of information that wasn't available in years past. They have access to numerous websites that show them every listing in the area of their choosing, as well as the ability to look up costs associated with interior upgrades and updated structural items that one home may have that another may not. Buyer's are able to arm themselves with information galour, and most of them are represented by a realtor, who is an information guru. Your home may be an amazing property, but buyers aren't going to be interested in looking at it if the neighbours home is drastically cheaper and offers similar esthetics, amenities and land. Your home needs to prove it's worth!
Don't Become a Stigma
Over pricing your home may not be an issue in the first week or two on market. You'll likely get some interest just because of how much work you and your agent put into all the 'other' marketing. However, the likelihood of your property sitting on market is high (just like your price). It's important to discuss the average Days on Market other homes in your neighbourhood are experiencing, and gauge your own homes situation from there. The longer a home sits, the less showings it receives, and interest from prospective buyers dwindles. This isn't just because of the price. As your home sits, it tends to pick up gossipy wonderings along the way. "Why hasn't it sold yet?", "What's wrong with it?", "Did another buyer find something in a home inspection and decide they didn't want it?", "Is the seller hiding something?" All of these are questions that buyers, and their agents, tend to start asking, the longer the home is on the market. Even though the answer to these questions may be "We're not hiding anything! Nothing is wrong!" The truth is, it boils down to the price.
You'll Lose More Money Than You Think
The longer a home sits on the market, the less interest it has from prospective buyers. As the days on market continue to climb, sellers can get anxious and frustrated with the lack of engagement. A lot of times the sellers think their agent "isn't doing anything" to promote it within their sphere of colleagues, and market it to a broader audience; however, sometimes it's best to look at what you, as the seller, are giving your agent to work with, and price is a major factor in your agents marketing. As the days on market continue to climb, you'll likely have numerous conversations with your realtor about reducing the price. Continued days on market also means buyers feel like they have more control over the price. You'll often see them trying to offer a purchase price that is significantly lower than the list price. Depending on the sellers pressures and desire to sell, the buyer could walk away with a great deal.
Selling Is A Lot of Work, So Why Postpone It?
Prepping your home for sale doesn't end once the sign is in the lawn, and it's posted online. The work continues for the seller for as long as it's listed. You'll have to constantly keep your home clean and tidy, you'll be forced out of your home at inopportune times, you can't leave 'just anything' sitting out like you normally do, and there are strangers roaming through your home. Selling is not fun! So, why pro-long the process?
If your agent is confident in their pricing, you should trust them. Afterall, they are the professional. This doesn't mean you don't have a say, or an opinion, and it's important to ask questions, and come to understand why your agent is presenting such a drastically different number than what you want. The one piece of advice you should remember is, be objective. Take your personal involvement and emotional attachment out of the home, and look at it objectively against the comparable properties your agent is showing you. Chat with your agent and truly understand how they got to their number.