Overpricing a Property

When a property is overpriced, that isn't "testing the market".  The sellers are actually helping to sell other listings.  This is a way of assisting buyers in their choices - they skip the overpriced home.  A seller's (with assistance from the agent) job is to price the property where the market will actually take note and consider it a viable purchase option.  What the seller hopes to get because of what the tax appraisal says (they are often wrong), the amount he/she paid for upgrades or what is needed for the next purchase is not a strategy.

The most traffic will be in the first three weeks of a new listing.  We aren't talking about "online" traffic...we are talking about actual "foot" traffic.  Buyers will typically begin their search on an online portal and they can quickly disregard a home that is overpriced and place it in the "not interested" category.  When a buyer does this, they don't typically go back and review the property.  Also, if the listing is above market (meaning it isn't aligned with similar properties), buyers will not see it and the property is invisible to them using pre-defined search criteria.  Don't let the wrong price block exposure, even if the photos are great and you absolutely "love" your property.

Days on Market (DOM) can also be a huge red flag for a seller.  A beautiful and updated kitchen or bathroom doesn't save an overpriced home.  It most definitely will help "sell" your property over others....if it is priced at market value or if competing listings do not have the upgrades.  In a balanced market (not seller or buyer market), 60-90 days without an offer can speak volumes to the sellers.  As hard as it is to accept, the house/property is a commodity and buyers are not going to pay extra money if all things are equal.  An exception to this is a buyer MAY be willing to pay a premium if they have a reason to want the property's particular location.  An example would be to live close to a relative or friend.  Another example might be if the buyers see value in the upgrades (such as existing pool is less expensive than building a pool) and planned on adding the upgrades/amenities already in the home.  However, remember that the home most likely will need to appraise for value.

Take a look at other properties nearby and see which ones are going under contract quickly.  Buyers are silently talking to you...you need to be able to interpret what they are saying.  In most cases they are telling you that there is better value in other properties.  So, you are helping your competition sell their house.  Their listing agent is probably telling them "that house at 1234 Competition Street" will help you sell yours.  Take another look at the Competitive Market Analysis (CMA) and check to see if your home is the most expensive option without true reasons for the asking price.

Feedback is important too.  It is harder and harder to get honest feedback from showing agents.  But if you do, don't take it personally.  Remember, your home is a commodity.  We know you have many memories and are proud of your home, but a buyer will never put a price on your memories.  Buyers are looking and comparing sticks and bricks.  They may be saying that there is a better house for the money.

The moral of the story can be summed up in a few words...don't price your home with your wishes, memories or what you need for your next move.  The house value stands alone.  There is a highest true price range.  Take a breath and price correctly for your market.  

Kathye Warfield, Realtor  (28 yrs. Experience)