It’s common for sellers to believe their homes are worth more than the market will bear. Years of improvements to a home can certainly add to an owner’s perceived value of the home. Understand that Supply and Demand ultimately determines your Selling Price.
In reality, the price is mostly a function of supply and demand.
How many homes are for sale in your area? At what price, and have you been them for a showing? How do they show? Furthermore, what are you doing to generate DEMAND for your house? Unless you lived under a rock, you know technology has entirely changed the marketing landscape. Newspaper classified advertising often isn’t enough, but it still is wise to utilize this channel. Most qualified, active buyers are working with real estate agents … make sure you create demand for your home by listing with the leading real estate company with continuous and aggressive marketing programs in your area.
The Dangers of Pricing Too High
You probably have lots of emotion “built in” to your house. Maybe you fixed it up, or you raised your children there. Your home is your “special” place. However, when it’s time to sell, don’t let emotion play a role in your pricing decision!
Many sellers don’t understand that overpricing can actually result in your getting LESS for your house than if you had priced it correctly in the first place. Knowledgeable buyers often won’t bid on an overpriced home. By the time you “wise up” and reduce the price to where it should have been priced in the first place, many of your best prospects will have bought other houses. This decreases demand for your now properly priced home! The problem is exacerbated if you placed your home on the market in the spring, it sat on the market “overpriced” throughout the summer, and now that you’ve reduced your price, the market has slowed.
Also, consider that agency tend to steer buyers away from homes that have been in the Multiple Listing Service for long periods of time. Buyers become suspicious that something is wrong with your property if it didn’t sell relatively soon after went on the market. It’s important to price it right the day you put it on the market!
Also, consider what you could have done with the profits from the sale of your home if you have priced it right. Suppose you price it right and your house sold relatively quickly, and then invested in that money in a rising stock or bond market. On the other hand, suppose you overpriced your home, and after several months, had to reduce it to where it should have been priced in the first place. Even worse, the house still isn’t sold! You probably get the picture.