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Why overpricing your home is a bad idea

by ShelMarkblog | 01 March 2019

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It may seem logical to think that setting the price of your home above market value when selling might be a good idea to give buyers room for negotiation. You may also think that doing so would allow you to pay the agent their commission without compromising what you receive from the sale proceeds. If you think this sounds like a win/win, you’re not alone.

The reality however is that overpricing your home could actually do more harm than good. Why? Because an overpriced property is likely to take longer to sell.

Overpriced homes attract fewer buyers at open homes and fewer clicks online. This then causes buyers to lose interest and perhaps even wonder if there is something wrong with the property. And the longer a property lingers on the market, the lower the price when it eventually sells.

Properties that are realistically priced from the get-go, on the other hand, are more likely to sell within the higher end of its value scale in a shorter timeframe.

Of course, there are a number of things that contribute to the time a house spends on the market. However, the initial pricing structure has proven to be one of the most influential factors in determining the time to closing.

There is a common misconception that real estate agents have a tendency to undervalue properties in order to get them sold as quickly as possible. However a professional real estate agent is more concerned with ensuring their client’s property is accurately priced in line with current market conditions.

With this in mind, it is important to be receptive to your agent’s advice on the price point and also on how to prepare your property for sale so that it attracts the market you are going for. A well-presented, competitively priced and professionally marketed new listing attracts a lot of attention, increasing the prospect for a favourable sale price without the need for a price reduction. It’s about taking advantage of the early momentum. As they say, first impressions count, not only with the look of your home, but also in terms of its price point.

Contact us if you would like a current marketplace appraisal of your home.

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