In the past, I’ve been inclined to accept listings from sellers who I knew were unrealistic in their expectations as far as pricing was concerned. You know who I’m talking about… the seller that believes even though all the homes in the area are selling for 300k theirs is worth 375k. I always felt that I could show them that after 30 days, with no Offer, they could reduce the price and VOILA! The home would sell!
A big problem in the Raleigh area is that sellers have an inherent ‘attachment’ to their home–they want to move but, won’t consider reducing the price to the point at which it will actually SELL. “My home is worth $___ and I have done $___ amount of work to the home so, I’m not just going to give it away!”
This is a common trend among sellers who tend to overvalue property that they own. The problem is, is that disconnect created between sellers and their potential buyers can ultimately cost sellers a good deal of cash. Here’s how:
- Buyers searching for properties in a particular square foot range AND price range will not find an over-priced home. If you, as a seller, price your property above the competition, your listing will not be seen by buyers looking online and remember that over 90% of buyers actually FIND their next home ONLINE!
- Buyers who do actually find your home online, will be comparing your home to other homes in that same price range. If your property is overpriced, the buyers will be comparing yours to homes (price the same as yours) with more square footage. As the old saying goes, buyers want ‘more bang for their buck’ – in this instance, more square footage for the dollar. If you’re the overpriced property, chance are, buyers won’t even look at your home and if they do, it won’t ‘win’ the buyers’ Offer. If it does, by chance, win the buyers’ Offer, statistics show, it will be a low-ball Offer.
- If you’ve heard the stories about low-ball Offers, here is the criteria for inviting them
- A home listed on the market for longer than average days on the market for that particular community.
- A property that has not had one price reduction in over 30 days--or worse, during the life of the listing.
- An overpriced home that the buyer and their agent have performed extensive comparable sales research and found that the property is seriously over-priced.
Buyers also have a safety net with overpriced homes–the appraisal! Should your overpriced home receive an Offer, the buyer’s lender WILL order the required appraisal in order to have mortgage approval. Should that appraisal fall short, a whole new can of worms is opened up! Most importantly, no lender will loan your buyer money if the home does not appraise at or above the Contract price.
To make matters worse for sellers who overprice their home, with no Offers for months, even with multiple real estate agents representing them, a languishing home looses value in the market significantly. Many languishing homes wind up selling for less than area foreclosures.
Raleigh home sellers AND home buyers rely heavily on their agents’ ability to put together a comparative market analysis (CMA). These CMAs reflect the likely price that a buyer will pay for a particular property. Redefine the market value of your home – pay close attention to the expert advice that you receive from your Charlotte real estate agent.
If you do insist in listing your Raleigh home for sale at a price that is above market value (overpricing your home), pay careful attention to the feedback that you receive from your perspective buyers. As well, you simply MUST agree to a price reduction within WEEKS, not months of listing your home. A ‘stale’ property (one that has been on the market for months) with a now, great price, is as dangerous for sellers as a new listing that is overpriced. Not to mention, the languishing home on the market is reduced in value so severely that had you priced it right from the beginning, you could have found yourself with multiple Offers!
Don’t take that chance–price your home according to the MARKET VALUE; do NOT price your home with your heart! Don’t be stubborn! Listen to the expert when it comes to pricing your Raleigh home for sale – if you don’t trust your agent, have an objective appraisal done on your home! It could very well be the best $400 you’ve ever spent!
If you have any questions don’t hesitate to call your Real Estate Expert (cough cough*me