Overpricing Can Attract Fewer Buyers
9 Jul2010
Filed Under Selling · Tagged: overpricing, Pricing, Selling · Print This Article
I can’t stress enough to my clients how important it is not to overprice their home. Many people think, “why not? Price it higher and see if anyone will pay it!” We’re going to discuss some of the reasons why this does not work.
OVERPRICING WILL BRING FEWER BUYERS TO YOUR LISTING.
Internet Searches
When you list your home too high, you prevent some buyers from even finding you. Many buyers start looking for their new home before they even call an agent. These buyers are searching online, and will pick a price range in which to look. If your house is appropriate for them, but listed out of this range, they won’t even see your listing. They may print out a stack of homes for their agent to show them, and your house won’t be in that stack. Some agents might not even stray from the client’s list, or the buyer may settle on another house before a saavy agent digs up your listing and realizes it could be in budget.
In my experience, I’ve actually had sellers admit that their desire to price a home higher than my suggestion does not work! I had one client, Heather, who worked in the mortgage industry and was determined to sell her home higher than my suggestion. She says, “I thought [Amy] was just trying to sell a house, and the lower the price the better off she was because it would sell faster… boy, was I wrong.”
The internet traffic to Heather’s listing proved that overpricing will hurt your online listing. “I had 37 views on the first day, half that on day two, [and] by the end of 7 days, ZERO traffic until I changed the price. Then I ONLY had half of what I had on day one, but could never get the traffic back from that first day,” Heather says.
A Waste of Time
Internet traffic is super important. Buyers may start looking online as far as 12 to 18 months before they hire a Realtor. They learn the market and what they can get in their price range.
When these buyers start working with an agent, that agent is working within the buyer’s price range. My Buyer Specialists are not going to take our clients to a bunch of overpriced houses that are out of the buyer’s range. That can make our clients frustrated. It’s the same reason car dealers won’t have you test drive a luxury sports car when you’re looking for a cheap used sedan, or a wedding stylist won’t have you try on a $10,000 gown when your budget is $500. It’s a waste of their professional time, and the clients are just going to get frustrated and walk away. So this is going to bring fewer agents into your home for showings. It’s a red flag that says you could be a difficult seller, or that your selling agent isn’t clued in to how to properly price a home. That’s why I don’t want overpriced homes in my listings, because I would rather get your home sold.
Helping the competition
You might not realize it, but you’re just making your [very tough] competition in this market look better. When buyers or agents see comparable homes priced less than yours, you are making those homes look like the best deals on the block. They’re going to start with those homes that are closer to their budget rather than bother with your overpriced listing.
It’s a buyers market, and the inventory is high. When you prevent buyers from even seeing you, you prevent yourself from getting sold. Is fewer buyers and extra time on the market worth that slight chance that some buyer might pay your unreasonable price? Consider how unlikely this is, and concentrate instead on an appropriate price that is going to put more eyes on your home and get more buyers in for showings.
Stay tuned to the blog for more information about the pitfalls of overpricing.
Read more on AmyBSells.com:
Sellers: Avoid These Pricing Mistakes
Are You in DENIAL About Your Home Sale?
Winning (and Selling!) with your Realtor
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