Overpricing - The Worst Mistake a Seller Can Make

It's easy to get caught up in the excitement over choosing a sales price. More money means more financial opportunities for the homeowner. Perhaps it means the seller can afford to buy a more expensive home, help pay for a child's college education or take that greatly overdue vacation. Unfortunately, uninformed sellers often choose the listing agent who suggests the highest list price, which is the worst mistake a seller can make.

Establishing Value 
The truth is it doesn't really matter how much you think your home is worth. The person whose opinion really matters is the buyer who makes an offer. Pricing homes is part art and part science. It involves comparing similar properties, making adjustments for the differences, tracking market movements and taking stock of present inventory, all in an attempt to come up with a range of value. It's an educated opinion and the market will dictate the price.

Is it Too Low?
Homes sell at a price a buyer is willing to pay and a seller is willing to accept. If a home is priced too low, priced under the competition, the seller should receive multiple offers to drive up the price to market value. So there is little danger in pricing a home too low. 

The Effects of Overpricing
- Reduces advertising response
- Loses genuinely interested and qualified buyers
- Attracts the wrong prospects
- Helps sell competitive properties
- Reduces offers
- Property takes longer to sell
- Reduces interest of sales consultants

The period shortly after a property comes on the market is usually the time of greatest interest and most inquiry, and it is critical that a property be correctly priced when it is first listed. Houses that sell quickly, and usually for their optimum value, are those that have been priced correctly at the beginning of the marketing campaign. Don't try to sell at a higher price initially and then come down if it doesn't sell. Good buyers could be lost, maybe forever. If you miss this initial opportunity you not only run the risk of being overlooked by future buyers who may be concerned about why your house hasn't sold, but also run the risk of having to sell further down the track at a price below the true market value.