The Risks Of Overpricing Your Listing

Selling your home or property is a major decision, and more often than not, the first thing everyone thinks about is price. Whether you are using an agent or selling yourself, getting the best offer possible for your home is of the utmost importance. But while sellers are inclined to ask for as much as possible, there are significant problems that can arise when a property is listed too high for its market. Here are some of the pitfalls and problems that arise when sellers list their property for too much.

1. Negative Buyer Perception: For a new real estate listing, the first few weeks are crucial for a successful sale. Buyers will naturally pay more attention to newer listings in hopes of finding a great deal or a property that is highly desirable. However, once the initial listing phase passes and the "new" sticker is removed, buyers will naturally begin to ask, "what's wrong with it?" It is critical to avoid falling into this zone of buyer stagnation, as it makes a successful sale much more difficult.

2. Search Engine Stagnation: Just like people, real estate search engines will be less interested in your property the longer it is on the market. Websites like Zillow or Realtor.com use powerful algorithms to create interesting results for their users, and homes that have been on the market for a long time will show up in searches less often as time goes on. This means that even if a prospective buyer could be interested in your listing, it might never reach their eyes because it is buried below more recently listed properties.

3. Price Negotiations: Dialogue between buyers, sellers, and their representing agencies takes time. That time means that your property is sitting waiting for sale, but not creating the liquid capital you want and/or need. These negotiations can potentially take weeks for each point and conversation, and can involve very complicated adjustments and clauses to a potential bid on your property.

4. Seller Stress: Along with the above issues, having a property on the market for too long can potentially create a large amount of other complications for sellers. While the property is still listed, sellers will remain responsible for mortgage payments, bills, taxes, and any upkeep needed on the property. These items can be very costly and will also carry the mental burden of never knowing if or when the property will sell. Ask yourself, are months of frustration worth the extra money? Many sellers don't realize the stress of an unresolved sale until it is too late, and they find themselves months into a listing with no end in sight. Worse yet, relisting the property may be necessary to create a fresh start, which will create new fees and expenses.

Understanding the market in which the property is being listed is crucial to avoiding a stagnation due to overpricing. Everyone wants to make as much as possible on their sale, but avoiding the above problems can be just as valuable as an extra few percent on a sale price.