The strategy of overpricing your home when you list, knowing that you can reduce the price later, might seem to make sense at first glance. However, it seldom works. In fact, sellers who overprice their homes – even just 10% above market value – and then reduce the price one or more times often end up getting less than they would have if they’d priced it realistically from the start, as depicted in the Sale Price To Time-On-Market diagram.
- Fewer buyers – even if they’re otherwise attracted to your home – will respond to the online and offline marketing of it if they know it’s overpriced.
- Fewer agents will show your home to their buyers if they know it’s overpriced.
- The right buyers – e. looking to buy a home like yours – may never even view it because they’ll confine their search to a lesser price range where yours should be.
- You’ll attract the wrong buyers – e those looking in your price range – who won’t be interested in your home, having viewed other homes truly worth what you’re asking for yours.
- An excessive price on your property makes others more attractive– i.e. both those priced where yours is, and also those priced where yours should be.
- You’ll get fewer – if any – serious offers overall because buyers may consider doing so a waste of time.
- Even if you do get a serious offer, the excessive price can lead to a mortgage rejection for the buyer once the lender has a professional appraisal done on your This leads to critical lost time waiting for finance approvals that never go through.
- Reducing the price after buyers have begun to perceive your home as a stale listing will not generate as much interest as if you’d priced it properly from the
The Bottom Line: Realistic Pricing IS Strategic Pricing!
All this is why, pricing your home realistically right from the beginning – to coin- cide with its window of maximum market exposure so that you can best leverage buyer interest and emotions – is important, particularly in a market like this one.
If you do so, you’ll not only attract more buyers, you’ll attract the right buyers: qualified, motivated and willing to pay top market value for your home at the very time during the listing when you’re most likely to get it.