The Number One Mistake Sellers Make: Overpricing Their House

When it comes to selling a house, every seller wants to get the best price possible. After all, your home is likely your largest investment, and it’s natural to want to maximize its value. However, one of the biggest and most common mistakes sellers make is overpricing their property. While it may seem like a smart strategy to leave room for negotiation, overpricing can do more harm than good.

Here’s why overpricing your house is the number one mistake sellers make, and how it can negatively affect your sale.

First Impressions Matter

In today’s fast-paced real estate market, buyers have access to more information than ever before. Most buyers start their home search online, and the first thing they see is the price. If your home is overpriced, it may get passed over right away without potential buyers even taking the time to view the property in person.

Buyers often set filters when searching for homes, and if your price is higher than comparable homes, your property may not even appear in their search results. You only get one chance to make a good first impression, and pricing too high can cause your home to be overlooked by serious buyers.

 

Overpricing Means Longer Days on Market

When a house is priced too high, it typically stays on the market longer than similar homes priced appropriately. The longer your home lingers on the market, the more it can signal to potential buyers that something is wrong with it. Even if the house is in perfect condition, buyers may wonder why it hasn’t sold, leading them to assume there are hidden issues.

A house that sits on the market for an extended period becomes “stale,” and buyers may start to feel they have the upper hand in negotiations, leading to lower offers. In many cases, sellers who overprice initially end up having to reduce the price, sometimes multiple times, which can make the home appear less desirable.

 

Buyers Are Well-Informed

With the internet and access to real estate platforms, buyers are more informed than ever. They can easily look up recent sales in your neighborhood and compare prices. If your home is significantly more expensive than comparable properties, buyers will see it and steer clear.

Overpricing also sets unrealistic expectations. Buyers will expect your home to offer more than it realistically does compared to others in the same price range. If they view your home and find it doesn’t live up to the price tag, they’re likely to move on without making an offer—or worse, leave negative feedback that could deter future buyers.

 

Appraisal Problems

Even if you find a buyer willing to pay an inflated price, the sale may still fall apart during the appraisal process. Mortgage lenders require an appraisal to ensure the property is worth the loan amount. If your home is overpriced, it may not appraise for the agreed-upon sale price.

When an appraisal comes in lower than the sale price, the buyer’s lender may refuse to finance the full amount, putting the deal at risk. The buyer may either ask you to lower the price or back out of the deal altogether, leaving you back at square one.

 

Missed Opportunities with Serious Buyers

Serious buyers are often working within a specific budget. By overpricing your home, you may price it out of reach for the very buyers who are genuinely interested and ready to make an offer. These buyers won’t even consider viewing your home if it’s beyond their financial limits, no matter how perfect it might be for them.

Additionally, buyers may have agents who advise them on market conditions and comparable sales, making it less likely they’ll engage with overpriced properties. You could miss out on serious buyers who might have been willing to purchase your home at a fair market value.

 

Price Drops Can Be Perceived Negatively

If you realize your home is overpriced after it’s been on the market for a while, you may be tempted to lower the price to attract buyers. While this can sometimes help, price drops can also signal desperation to potential buyers, leading them to submit lower offers than they might have otherwise.

Buyers often assume that multiple price reductions mean something is wrong with the house or that the seller is struggling to sell. This perception can hurt your chances of getting a competitive offer, and you may end up settling for less than you would have if the home had been priced correctly from the start.

 

How to Price Your Home Correctly

To avoid the pitfalls of overpricing, it’s crucial to price your home based on its true market value. Here are a few steps to ensure you set a realistic and competitive price:

• Work with a Realtor: A professional realtor has access to market data and can perform a comparative market analysis (CMA) to determine the fair market value of your home. This analysis considers recent sales of similar properties in your area, current market conditions, and the unique features of your home.
• Be Objective: It’s easy to attach emotional value to your home, especially if you’ve lived there for many years or made significant improvements. However, buyers won’t have the same emotional attachment. Be willing to take a step back and view your home from a buyer’s perspective.
• Consider the Competition: Take a look at other homes for sale in your area. How does your home compare in terms of size, condition, location, and amenities? Pricing your home in line with comparable properties ensures you stay competitive.
• Think About Timing: Market conditions can change seasonally or in response to economic factors. Consult with your realtor to determine the best timing for your sale and how the market may influence your pricing strategy.

 

Overpricing your home is a mistake that can have long-lasting consequences, from driving away potential buyers to extending your time on the market. While it may be tempting to aim high, pricing your home correctly from the start is the key to a successful sale. With the right pricing strategy, you’ll attract more buyers, sell your home faster, and ultimately achieve a deal that meets your financial goals.

If you’re thinking about selling your home, reach out to a real estate professional who can help you avoid this common mistake and guide you through the process to ensure you get the best possible outcome.