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The True Cost of Overpricing Your Property

Setting the right price for your property is a delicate balancing act. Start too high and your home might sit on the market for months, and possibly not sell at all. Price it too low and you miss the potential for a more profitable outcome. However, a well-priced home tends to attract buyers, generate showings and produce offers. So, while aiming high might seem appealing, overpricing your home can lead to significant issues. Here are a few reasons why:

Prolonged Time on the Market

Overpricing your home can result in an extended period on the market, and possibly selling at a much lower price than initially anticipated. Today’s buyers are savvy and often work with real estate agents who use comprehensive market data to evaluate property values. If a home is listed above its market value, it tends to remain unsold for longer, creating a perception that something is wrong with it. This prolonged market exposure can lead potential buyers to become suspicious. They may wonder why the property hasn’t sold and assume there are hidden issues or defects. This stigma can be difficult to overcome, even if the price is later adjusted to a more realistic level. The longer the listing period, the more the property can be seen as undesirable, even if it is in excellent condition. 

Decreased Buyer Interest

An inflated asking price can significantly reduce the interest of potential buyers. Most buyers have a set budget and specific criteria for their home search. When a home is priced too high, it may not even appear in their search results, effectively excluding it from consideration. Additionally, real estate agents may be less inclined to show an overpriced home to their clients, as it may not align with their clients’ budgets or expectations. This lack of visibility can drastically reduce the number of showings, further diminishing the chances of receiving an offer.

Weakened Negotiation Position

Setting an overly ambitious price can weaken your position when it comes to negotiations. Buyers and their agents are likely to point out the lengthy time on market as a basis for negotiating lower offers, which can result in offers that are significantly below what you might have received if the home had been appropriately priced from the start. The negotiation process can become lengthy and challenging, with buyers feeling they need to compensate for the initial high price. This can lead to frustration and even the possibility of the deal falling through entirely.

Complications During Appraisal

Even if a buyer agrees to pay the higher price, complications can arise during the appraisal process. Mortgage lenders require an appraisal to ensure the home is worth the loan amount. If the home doesn’t appraise for the agreed-upon sale price, the lender may not approve the loan unless the seller lowers the price or the buyer covers the difference out of pocket. This can create significant obstacles in finalizing the sale and may even lead to the collapse of the deal, causing both the buyer and seller unnecessary stress and financial strain.

How to Price Strategically

Online pricing tools are notoriously inaccurate, so it’s unwise to view them as good indicators of a homes value. That is why it’s crucial to work with a knowledgeable real estate team who can appropriately assess market conditions and help you set a realistic asking price from the onset. Between an experienced real estate agent’s pricing recommendation and any online price tool, the former will always be able to provide you with a better idea of how much your home is actually worth. 

Here at the Royston Team, our Listing Specialists will help you determine the best pricing strategy for the current market and season. Even in a hot seller’s market, not every home will get top dollar if not priced correctly. We help you analyze where the home prices are trending not only based on the last 6 months, but look at the active and pending listings of homes similar to yours to determine your strategy. Our agents will present you with a price or price range that we suggest for your property. Generally, studying what has worked in your area – and what hasn’t – will help us to strategically price, position, and present your property to sell for top dollar in a reasonable time frame.

This is why hiring an expert is so important to ensure you get the right price and right exposure the first time! Our Listing Specialists would love to set up an appointment to come visit your property in Kitsap County and surrounding areas. No matter what your future plans hold, we are always happy to stop by your home to see what it could sell for in today’s market. Contact The Royston Team at 360-525-3574 or email info@roystonteam.com to get started!

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