Selling a home is a big decision, and one of the most important aspects of the process is determining the right price. Unfortunately, some sellers make the mistake of pricing their homes too high, which can lead to a host of problems down the line. In this blog post, we’ll explore some of the reasons why people price their homes too high when they sell them, and the potential consequences of doing so.
1. Testing the Market
One of the most common reasons why people price their homes too high is because they want to “test the market.” In other words, they want to see if there are any buyers out there who are willing to pay more than what they think their home is worth. While this may seem like a logical strategy, it can backfire in a big way. Overpricing your home can make it less appealing to buyers who are looking in your price range, and it can also turn off potential buyers who might be willing to pay more for a home that is priced appropriately. For example, a home that is worth $600K and the list price was $600K, it would be more likely to get that amount. However, if you listed a home that was only worth $575K for $600K, price reductions might eventually lead to a sale price of only $540K.
2. Leaving Room for Negotiations
Another reason why people may overprice their homes is that they want to leave room for negotiations. They may assume that buyers will try to negotiate the price down, so they start with a higher price in order to end up at the price they really want. However, this strategy can also be counterproductive. If your home is significantly overpriced, buyers may not even bother making an offer, or they may assume that you’re not serious about selling.
3. Believing a Higher List Price Will Result in a Higher Sale Price
Some sellers mistakenly believe that if they list their home at a higher price, they will end up selling it for more money. However, this is not necessarily the case. Buyers are savvy, and they will typically do their research to determine what a home is really worth. If your home is priced much higher than other similar homes in the area, buyers may simply choose to look elsewhere.
4. Misinformed About the Market
Finally, some sellers may overprice their homes because they are misinformed about the market. They may have received bad advice from a friend, neighbor, or another realtor who is not familiar with the local market conditions. It’s important to work with a realtor who has experience selling homes in your area and who can provide you with accurate information about pricing and market trends.
So, what are the consequences of overpricing your home? The most obvious consequence is that your home may sit on the market for longer than it should. This can lead to a variety of problems, including:
• Reduced interest from buyers
• Fewer showings
• Lowball offers
• A lower eventual sales price
In addition, if your home sits on the market for too long, it can start to develop a stigma. Buyers may assume that there is something wrong with the home, or they may wonder why it hasn’t sold yet. This can make it even more difficult to sell the home in the future.
In conclusion, pricing your home appropriately is crucial if you want to sell it quickly and for a fair price. While it may be tempting to overprice your home for any of the reasons mentioned above, it’s important to resist the urge and work with a realtor who can provide you with accurate information about pricing and market conditions. By doing so, you can avoid the pitfalls of overpricing and increase your chances of a successful sale.
“Behind the Curtin” provides an inside look at local homeowners’ beautifully-crafted houses, giving insight into what it takes to renovate, upgrade, and style the most coveted parts of their dream homes. In this video series, industry expert and business owner Joanne Curtin explores local homes while interviewing their owners who live well in their homes to better understand their thought processes when making important decisions. Join Joanne to get a look into the world of luxurious real estate one wonderful home at a time.
“Behind the Curtin” Episode 4 – Downsizing to a Townhome in Roswell, Georgia
Lucy Hintz lives in Roswell, Georgia. She recently downsized to a townhome near Canton Street. She divides her time between her home in Roswell and her second home in the Bahamas.
Joanne: Where did you live before moving to Roswell? What made you choose a new townhome?
Lucy: I have lived in Roswell, in a single-family home. But I had always wanted to live in a walking, shopping, dining community. I’ve always wanted to live near downtown Roswell. Another thing is, my husband had cancer, so we knew that it was time for us to get out of the responsibility of the really big house. We were also looking for a turn key we could have without overwhelming issues.
Joanne: What specifically about this property did you like?
Lucy: When we moved in to this unit, our basement was not finished so we had an opportunity to create what we wanted. We have another full bedroom and bathroom down there. I have grandkids, so when they come there is lots of space. I also have a fabulous deck so the outdoor space is awesome too.
Joanne: What did you do to improve your property?
Lucy: We’ve done a lot of things. We changed the wood floors on the main level, which is a beautiful upgrade. My kitchen was solid white, and I’ve taken the island and painted it to a dramatic blue. We finished the basement in full and built a patio outside with stones and made it home. We also put in bookshelves on both sides of the fireplace with separate beer and wine coolers. And we added a built-in bar with quartz countertop.
Joanne: Did you work with a designer?
Lucy: No, this is all us. We had a lot of people that worked for us at our former home. And I purchased the art at local interior design stores.
Joanne: What is your favorite room in the house?
Lucy: It would be the deck. We open up the French doors on the main level, where we can have a breeze and enjoy bringing the outdoors in.
Joanne: What were some of your favorite places to buy home furnishings?
Lucy: We got rid of everything from the old house. All the furniture came from Arhaus. For the art, I went everywhere from Kudzu to 13 Hub. I used Carpet Depot for flooring.
Joanne: What’s one splurge in your home you could not live without?
Lucy: I splurged on this whole house. My bed and the bedding came from Arhaus and it was a big splurge. Arhaus had a wonderful sales representative. And I don’t know if a lot of people are like me, but I stick with people who are helpful and good at what they do.
Joanne: What have you learned from this process of moving from a big house?
Lucy: It’s not as difficult to let go of things as we think it is. And to use an estate sale group was key. And I’m not just tooting the horn for you, but finding a realtor that really understood what we were trying to do was so important. Previously we had trouble selling our home. Your team are the ones who really transformed it. It was a matter of 30 days and we had an offer on that house.
Living in a neighborhood means we all just look after each other. I think when you’re looking for a different place in life, it’s important that you are in a community that’s similar, that has a lot of the same interests that you.
Joanne: Is there anything you would do different that someone else could learn from?
Lucy: I guess I would say, I think it would have been better to finish the basement prior to moving in.
Joanne: Is there any advice on what you think should not be skimped on?
Lucy: I just think once you find your home, make it your home. Don’t wait because whatever you put off is something you’ll never get around to, something else will take priority.