The Number One Mistake Sellers Are Making: Overpricing Their House

The Number One Mistake Sellers Are Making: Overpricing Their House

In today's housing market, many sellers are making a critical mistake: overpricing their homes. This common error can lead to a property sitting on the market for an extended period without receiving any offers. When that happens, the homeowner may need to lower the asking price to rekindle buyer interest.

Data from Realtor.com shows that the number of homeowners recognizing this mistake and reducing their prices is on the rise (see graph below):

If you’re considering making a move, here’s what you need to know: the best way to avoid a costly mistake is to work with a trusted real estate agent to determine the right price. Here’s what’s at stake if you don’t.

Not Paying Attention To Current Market Conditions

Understanding current market conditions is essential for accurate pricing. Setting your asking price based on what happened during the pandemic isn’t advisable, as the market has moderated significantly since then. It’s much better to align your price with today’s reality.

Real estate agents stay updated on market trends and know how these trends impact the pricing strategy for your home.

Pricing It Based on What You Want To Make (Not What It’s Worth)

Another common misstep is pricing your home based on what you want to make from the sale rather than its current market value. You might see other homes in your neighborhood selling for top dollar and assume yours can do the same. However, you may not be considering differences in size, condition, or features. For instance, that other house might be waterfront or have a finished basement. To sum it up, Bankrate explains:

“How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.”

An agent will conduct a comparative market analysis (CMA) to ensure your house is compared with truly similar properties, providing an accurate assessment of how it should be priced.

Pricing High to Leave Room for Negotiation

Another common, yet misguided strategy is pricing your house high on purpose to allow room for negotiation during the sale. However, this can backfire. A price that seems too high often discourages potential buyers from even considering the home. So instead of leaving room for negotiation, you may actually be turning buyers away. U.S. News Real Estate explains:

“You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you've overpriced your home, chances are you'll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.”

An agent can help you set a fair price that attracts buyers and encourages more competitive offers.

Bottom Line

Overpricing your home can have serious consequences. A knowledgeable real estate agent offers an objective perspective, in-depth market knowledge, and a strategic approach to pricing.

Let’s connect so you can avoid making a pricing mistake that could cost you.