- A well-priced home attracks more buyers, generates more appointments, yields more offers and shortens the amount of time your home stays on the market.
- An underpriced home might be overlooked by the perfect buyer because they might assume something is wrong with the house. Even though it might sell faster, it will sell less than its fair market price and yield less earnings for you.
- An overpriced home will not generate much interest, less offers if any, a longer time on the market, and possibly result in price cuts – which can weaken your negotiating position.
The right price should:
- Attract more buyers
- Allow you to profit the most money possible
- Help you sell faster
What’s the risk of overpricing your home?
- It is a known fact that your home will make its first impression during the first few weeks. If your home is overpriced during its initial introduction to the market, you will lose the opportunity to be in front of the right buyer.
- Don’t start with a high price and the assumption that you can reduce it later. By the time you decide to lower the price, it may be too late, as interest will have already waned.
- Don’t understimate the appraisal. If you price your home above its market value, the appraisal will evaluate your home’s worth from a data driven perspective which can result in loan rejection for your buyers.
- Get ready to embrace more costs: The longer your home stays on the market, higher costs will accumulate in the long run: mortgage, insurance, utilities and more.
- By overpricing your property you are making it easier for your competition to sell it’s lower priced homes. You help them create a value to their homes and you will lose these buyers.
Below is a graph that shows how the home prices affect the buyer’s behaviors. The closer you stay with your home’s market value, the more buyers will want to visit your property and get a chance to fall in love with your home.