What Happens When You Overprice Your House?
Reading a “Realtor Only” post over at Active Rain, I had to laugh at an agent’s analogy that taking an overpriced listing is like dating a married man. Basically, you’re wasting your time and energy on a relationship that has no future - destined for failure.
I find many sellers want to price their house higher than market value so they’ll have some negotiating room. They know what they want for the house (period) and seem terrified that someone will try to get it for less. They don’t want to appear stubborn by NOT negotiating, so the higher price is their choice.
But what really happens when you overprice your house?
First, you potentially lose buyers who are looking RIGHT NOW - often the most important buyer. Buyers do go online - a lot - to find out if there’s anything new in their price range. If it’s overpriced, they don’t even find it but they will find the one that’s priced correctly.
Second if the home is overpriced, it will linger on the market to the point that people start thinking there’s something wrong with it. Price reduction after price reduction sends a terrible message - it’s stale and undesirable.
Key is getting the price right at the get-go - or maybe pricing it a couple thousand BELOW market value. If it’s price is tempting, you’ll hopefully get immediate interest and offers. You can negotiate UP in price just as well as down in the event the buyer wants concessions like closing costs, title insurance, or a warranty.
The Maryland Real Estate Blog offers even more insight on why you shouldn’t overprice: the appraisal.
The second problem is centered around the appraisal. Let’s say your house is valued at $300,000 and you are convinced you can get $350,000. OK, you do get a knucklehead to offer your $350,000 and you are flying high! You are throwing out one “told you so” after another at your agent. Here is where it bites you. Your generous buyer’s mortgage company then comes into play. To protect their interest in the investment, the mortgage company will then send out an appraiser to value the property.
If you decide you’re ready to sell, remember to be picky that your agent isn’t telling you anything just to get the listing, that it costs you time and emotional wear-and-tear to overprice, and that the listing could grow market weary.




