Determining the price of your home is no easy task. The entire process of signing a contract to list can be an emotional roller coaster because your home holds priceless memories. Unfortunately, one of the biggest mistakes a seller can make is listing their home too high. Wondering why? Here are some of the pitfalls we've discovered when overpricing your home.
Buyers are smarter than you think, and so are their real estate agents. People looking to find a new home spend hours researching neighborhoods, which gives them a ballpark idea of how much a property should cost within specific communities. If your home is listed at a significantly higher price than other properties in your neighborhood, it'll raise red flags with a buyer and agent. According to broker Candy Miles-Crocker, many buyers won't look at your property if it's priced too high. When someone wants to move, they need to trust that they are getting everything they are paying for at a reasonable price.
Longer Time on the Market
One of the biggest downfalls of listing too high is that your property may spend a longer time on the market. The longer it's on the market, the less appealing it is to buyers. According to Landmark Home Warranty, the first assumption agents and buyers will make is that there must be something wrong with the home. Within the first 30 days, your home will receive the most traffic and showing requests. Once you get past that initial period, you'll see a decline in numbers. Your chances of receiving an offer that's lower than your asking price are significantly higher if your house is on the market for a while.
If you can score a deal at your desired listing price, you may face issues in the appraisal process. Many buyers depend on financing to purchase a home, which means the lender will request an appraisal for the property. If the appraiser finds that the market value is lower than the listing price, the lender will deny the buyer's request to finance. This will put you back to square one, and you'll be searching for another buyer. Sellers can avoid this situation by agreeing to a price that is appropriate for the property.
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