Overpricing their property is one of the most common and biggest mistakes that homeowners commit when selling their homes. Although hoping for the best and highest price is just natural, overpricing can do more damage than what you could imagine.
Here are the reasons why overpricing your home is a big mistake:
Best prospects will not be able to see it
When looking for properties, buyers usually use property websites and browse according to their budget. One of the reasons for this behaviour is that buyers don’t like to negotiate – negotiating is sometimes perceived as offending and insulting for the seller and embarrassing for the buyer.
If you listed your property with an unreasonable price, there is a higher chance for it to appear in fewer searches, bypassing your best prospects. On the other hand, buyers who are looking at the same price bracket will more likely compare your property to larger homes that have been accurately priced.
Listing will become stale
In a recently conducted research comparing the difference between the fairly-priced properties with those that are either discounted or overpriced, it was found that reasonably priced properties sell 58 days faster than overpriced counterparts on the average.
The data also showed that discounted homes stay in the market at an average of 91 days and take around 63 days longer than properties with fair prices in the same area.
Buyers will be suspicious
As your property stays longer in the market, buyers might become suspicious and think that there is something wrong with the property.
Using the average days on the market (DOM) which can be provided by a real estate agent, buyers can find out a list of every home that has been on the market longer than the average DOM. Price reductions made on a property can also be seen on property websites.
In addition, properties that are new to the market are favoured by buyers, making a stale listing their last option.
You will end up getting a lower price
In the same research, it was found that overpriced homes sell at £12,000 lower than their listing price.
Overpricing your home increases the risk of the local property market to change while your property is in the market. While waiting for your property to sell, the economic growth may slow down, urging the local property market to shift accordingly.
As a result, you may end up selling your property at a lower price.
In summary, you should keep in mind that accurate pricing can ensure you a swift sale. Overpricing can make your sales process longer as you lose control of the sale. It is important to align your expectations with what a buyer is willing to pay for a property in a particular location.
Written by Heidicel Serrano