We know that:
- Everyone wants to get the best possible price for their home when they sell.
- A home is only worth what a buyer will pay.
We know that listing too low will result in selling for less than what the seller might otherwise achieve. We also know that an overpriced home will likely linger on the market, forcing price reductions that may push the final sales price below the best price for the seller, extend time on the market, and raise the expenses for the seller.
Why does overpricing occur?
• The seller perceives that the home is worth more than the market will support, often assigning too much value to the positive features of the home such as upgrades
• The seller miscalculates the fair market value based improper research, such as over-reliance on online generated value estimates or because of misunderstanding the fair market price indicators
• The seller believes that testing the market price by overpricing early is a logical, valid tactic
• The seller accepts the advice of "professionals" who are projecting overly optimistic results. Often, these agents are hoping to land the listing and then later convince the seller to drop the price to a price the market price. This is sometimes referred to as "buying the listing". Estimates are that between 10% and 50% of listings are initially overpriced which suggests that the practice of "buying the listing" is widespread. The NAR (National Association of Realtors) frowns on this practice. In fact, it may even be considered a violation of Realtor ethics rules as this is attempting to secure a listing by, "deliberately misleading the owner as to the market value".
• The agent working for the seller lacks experience or skill in determining market value and suggests an inappropriately high price inadvertently
Pricing, especially the initial pricing may be the most important part of selling your home.
Your home has the best chance of selling for the highest return early on in the "For Sale" cycle. Do not leave this important step to a best-guess estimate. Call a professional Realtor to help.