Why You Shouldn’t Overprice Your Home
With recent changes to interest rates, homeowners across Canada are looking to take advantage of the dynamic real estate market. It makes sense that sellers want to get the best prices for their properties and maximize their profits. However, it’s essential that you work with an experienced real estate advisor to price your home based on market value—and list it at a price point that will be competitive and enticing to potential buyers. Pricing your home too high is a common trapping, especially for first-time home sellers. Here are a few key reasons why you shouldn’t overprice your home when it comes time to sell.
It Makes Your Home Unattractive To Buyers
The number one reason you should avoid overpricing your home is simply that it makes your listing unattractive to buyers. When buyers look online for properties, they often seek out other similar homes in your area and filter by their budget range. If your home is overpriced, it won’t be listed in their search results—even if it meets several other points of their home-buying criteria. As they search, buyers will see many other equivalent properties at lower price points because they were all assessed at fair market value. If your home is overpriced, it will stand out negatively and impact the number of offers you receive.
It Leads To Unnecessary Negotiation
Overpriced homes typically have fewer offers, but some buyers still bid on them. The discrepancy between an overpriced home’s market value and its listed price means that the realtors on both sides need to negotiate in order to reach an agreement on price. Keep in mind that it’s common for negotiations to fall through when a property is overpriced because the spread between the seller’s price and what buyers are willing to pay is too wide.
It Extends Time On The Market
The primary goals of selling a home are to maximize profits and minimize losses. Whether you own your home outright or there is time remaining on your mortgage, it’s expensive to carry the costs of a listed home. Even if your home is unoccupied, the costs of the mortgage, property taxes, and insurance are an expense most home sellers want to get rid of as quickly as possible. The longer your home remains on the market, the more you will have to pay in carrying costs. It’s also essential to consider that the longer your home stays on the market, the less enticing it is to buyers. For instance, if your home is overpriced and has been listed for six months or more, potential buyers will immediately wonder what is wrong with your home—and move on to more recent (and appropriately-priced) listings.
It Leads to Lowball Offers
Although a long-term listing is unattractive to most homebuyers, there are some real estate investors and bargain hunters who specifically seek out overpriced listings. By searching online for houses that have been on the market for six months or more, investors submit lowball offers to sellers who are desperate to offload their homes. Keep in mind that it’s common for sellers who have overpriced their homes to sell for less than fair market value—not to mention the additional losses from extended carrying costs.
Are You Interested in Selling Your Home or Property?
As an experienced real estate advisor, I understand the current real estate market in Victoria, Cowichan Valley, and the South Island’s Westshore communities. I work with clients to assess their homes based on fair market value. My experience will help you reach a competitive selling price for your home and make your listing enticing to buyers. Contact me today to learn how we can work together to optimize your investment!