“We can always go down, but we can’t go up.”
Have you ever heard that from a client? If you have been on many listing appointments, you have probably heard this statement once or twice. When setting the sales price of their home, many sellers are tempted to tack on a few percentage points to “leave room to negotiate”.
Overpricing a home can have many ramifications for a home seller. It can limit the number of potential buyers who can afford your home, reduce showings and create an impression in the marketplace that the homeowners aren’t really serious about selling their home. Serious homeowners who overprice their home often get caught in the trap of price reduction after price reduction trying to catch up to the market.
During the past year, U.S. home sellers slashed more than $24 billion from home listings on Trulia.com. Trulia’s Q1 Home Offer Report indicated that on average, most sellers will reduce their list price after 79 days on the market, choosing to cut their original list price by 8 percent. Following a first reduction, 35 percent of these sellers will make a second.
Most homebuyers look at 10-15 homes before making a buying decision. Because of this, setting a competitive price relative to the competition is an essential component to a successful marketing strategy. Underpricing a home isn’t good either- educating your clients about the importance of properly pricing a home is key to the home sales process.
We put together this handy tip sheet to share with your sellers on the seven deadly sins of overpricing.
Please download and share!
Whenever I have a seller looking for more than their home is worth – I show them homes in that price range. Then I ask them what they would pay for their home – knowing what the competition is… If they still quote the overpriced number I congratulate them and say “You are the highest bidder on your home. Congratulations! YOU still own it!”. Then I ask them again if they would like to SELL it…
That is genious! Thanks for the great tip!
I plan on using that one too. Fantastic Beverly!
Bravo!!
Wish I read this about 9 months ago!
Reality is such a good thing….
I love this! I will totally use this thank you!
Great article (7 Deadly Sins of Overpricing), and love the handout, I’ll be sharing this with a few local agents who are notorious for overpriced listings. One overpriced listing you can overlook, but when all their listings are overpriced, it becomes clear they’re responsible not the Seller.
Excellent and timely article says what we always say to sellers but with “your” name on it
Margaret Simpson, GRI Broker
THE #1 REASON HOMES DON’T SELL IS OVER-PRICING. SELLERS DON’T REALIZE THAT THE ORANGE
PAINT ON THEIR WALLS ARE NOT ATTRACTIVE TO EVERY BUYER AND THE ROTTED WOOD ON THE EVES
NEED TO BE REPLACED BEFORE THE HOUSE IS PLACED ON THE MARKET. BUYERS LIKE TO ENVISION
THEMSELVES LIVING IN THE HOME NOT REPAIRING EVERY LITTLE THING BEFORE OR AFTER THE
GRAND MOVE-IN. IF ONLY WE REALTORS COULD ENCOURAGE THE SELLERS TO LOOK AT THRIR PROPERTIES WITH A CRITICAL EYE AND PRICE THEM ACCORDINGLY.
Totally agree, overpricing can definitely lead to not selling the house. here is a blog about just that.
http://blog.house-guy.com/2011/05/16/what-if-you-happens-if-you-don%E2%80%99t-sell/
Had this conversaton yesterday almost to the tee. Right on.
We are in a recreational area of waterfronts and oceanview homes properties on the Sunshine Coast in British Columbia. We too have a Halfmoon Bay area. We are definitely still in a buyer’s market ie/ 1 in 20 homes are selling each month, so are seller’s are having to follow the market down if they are overpriced, which most are according to the above statistics!
We just sold a lovely ocean view architectural home for $435000 (gov’t assessment at $654k!) and another gorgeous waterfront home with 70 ft boat dock for $1,200,000 previously listed with other agents as high as $1.9 mill.
Thank you for the tips on how to present overpricing in another light. Bev Thompson 1 888 740 7355.
Very Helpful! Sometimes when it is written in black and white, it is easier to understand and it is not just words spoken. Great handout.
This exercise is very useful and will likely be required for Sellers going into the next few years. Sellers will only get serious about pricing when they have a macro level perspective about where their property ranks relative to the competition.
Great work!
We just sold by house ourselves. We had to sell after owning it for just over 1 year due to a major health crisis. We had done major renovation work. All extremely well done with great results (did it mostly ourselves). I met with a realtor early on and we “crunched” the numbers. She told me there was no way we would get more than $400K for the house. Based on that info we had no choice other than to sell it ourselves, as adding another $25K to the price would clearly not work. We priced it at $429K, had a couple of open houses and decided to reduce it to $419K. We sold our house for $419K The house was on the market for 6 weeks. Lesson learned…sometimes you need to go against professional advice and try it yourself. All realtors are not corect all of the time.
If you price the house right, that is, the price at which it should sell, a buyer will always offer less. What do you do, drop the price to the asking or say no? Could this be avoided by having “wiggle room” as you have suggested not to do?
[...] Overpricing a home can have many ramifications for a home seller. It can limit the number of potential buyers who can afford your home, reduce showings and create an impression in the marketplace that the homeowners aren’t really serious about selling their home. Serious homeowners who overprice their home often get caught in the trap of price reduction after price reduction trying to catch up to the market. via pro.truliablog.com [...]
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