There are many factors involved in a successful home sale, but nothing is more critical than pricing a home properly from the beginning. Determining a fair market value is not an exact science as each home has its own personality and attributes contributing to its value. Real estate agents research similar properties that have sold, analyze active inventory and review the ever changing market conditions at the time of the evaluation. All of these elements, along with knowledge and experience allow real estate professionals to establish a relevant range of value. It is the market data that speaks.
Properly positioning the home from the start eliminates many pitfalls that occur if a listing is overpriced. If a home is overpriced, these are some of the dangers a seller will likely encounter:
1. The buyers who can afford your home will not see it. Buyers search within a price range that they can afford. If a home is above market, it will not come up in their search. Instead, it will be seen by buyers who have higher expectations than the house offers at that price.
2. Your listing will help sell the competition. Buyers today are very savvy and have limitless information available to them on the internet. They know when a property is overpriced because they are looking at the other homes available as well. They will choose the property where they perceive the value.
3. When a property sits on the market too long, potential buyers can become skeptical and wonder “what’s wrong with this house” and stay away from it. It will most likely sell for less than it would have had it been priced right in the first place. It is also likely to receive "low ball” offers.
4. There is no chance for competition. If a home is overpriced, it will not result in multiple offers, whereby a well priced listing may have multiple bidders that can result in a price well above the list price. Nothing brings top dollar better that competitive bidding.
With the right guidance and accurate pricing, you can avoid these pitfalls, the inconvenience of having your house on the market for months, and sell your home for top dollar. Remember: You never get a second chance to make a first impression.