Caution About Overpricing

Posted Dec 29, 2006 @ 1:50 pm, Viewed by 753 Visitors, Read 754 Times.
Possibly the most contentious part of a discussion between a seller and a real estate agent happens over the suggested price for a home. Certainly this is understandable, as the ultimate sales price reflects how much money a seller stands to net when the transaction closes. When you list your home for sale, the most important factor for determining whether your home will sell is the list price. Here are some important reasons why:
 
The First Week is Very Important - When your home first goes on the market, many agents and buyers will have an interest in your property that only lasts a short time. Even more buyers have notification emails so that when properties that meet their criteria come on the market, they will be notified. If your home is not priced correctly, you will miss the opportunity for a fast sale from these “in the market” buyers.
 
Overpricing Will Net You Less Money - As the seller, you have monthly or annual costs associated with the home such as taxes, mortgage payments, sanitation and utilities. Every month that goes by that your home does not sell, you are making those payments and eating away at your net proceeds.
 
Overpriced Homes are Shown Less Frequently - Homes priced more competitively for the market will attract more buyers. Real estate agents looking for homes to show their clients know which homes are priced fairly and will avoid overpriced homes to protect their client’s interests. Selling real estate is a numbers game and you must attract the right buyer at the right time for your home to sell. It is imperative that you maximize your chances by pricing your home correctly for the current real estate market.
 
Overpriced Homes Appear Stagnant – A home that is overpriced will sit on the market much longer than the correctly priced competition. At this point, you will have only a few options available. You can reduce the price, which is interpreted as needing to sell, and this affects your ability to negotiate. The other option will be to take your home off the market for a week or so and then re-list your home at a lower price. Neither option is very good from the sellers perspective.
 
Please keep these factors in mind when you consider the list price of your home as it will have an essential role in whether or not your home sells in a timely manor. Only the very best homes sell for top dollar in a buyers market. Find out how you can sell your home for top dollar with these tips on preparing your home for sale.

Ryan is a REALTOR® serving the Atlanta Real Estate Market including Alpharetta, Buckhead, Chastain Park, Dunwoody, East Cobb, Roswell, Sandy Springs, Milton and John's Creek.

Phone: (404) 630-3187
Atlanta Real Estate
ryan (@) ryanwardrealestate.com

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2 Responses to “Caution About Overpricing”

photo Wayne Long

Ryan - you are dead on with these comments. We think that there is a market price that your Realtor can help you establish and that if you price your home more than 5% above this you will have a hard time selling your home. In a market like we have now it makes more sense to price your home at the market price or even just a little below because of the carrying costs your mentioned in your post.

Posted 1 year ago
photo Ryan Ward

Thank you Wayne. I forgot to mention one thing and you just touched on it. When I first got inot the business, my broker explained something called anticipated price. It is a critical consideration and should generally be handled by someone who has examined the market closely. Quick Example: Market is heading down 4% annually. Your home is worth $100,000. Average days on the market are 90. $99,000 is what the market is saying your home will be worth in three months when your home sells.

Posted 1 year ago
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Ryan Ward Welcome to my real estate blog! I will try to provide you with relevant and timely information about the Atlanta real estate market as well as information that you can use if you are in the market to buy or sell real estate. Read More

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