Every Seller thinks their home is the best home on the market, and believes that all it takes is the right buyer who will fall in love with the home, and the Seller will get what they want for it in terms of price. Unfortunately it doesn’t usually work that way. Dealing with a Seller who wants to overprice their home can be a huge frustration for a Realtor.
Here’s the reality: the most common reasons a home won’t sell are 1: Price, and 2: Condition. So if the condition of your home is good in comparison to other properties on the market – it all comes down to the price. Of course good marketing and great photos help a listing sell – but at the end of the day a buyer is comparing your home to others like it – and searching for the best value.
I like to use this analogy… Let’s say you need a gallon of milk. Publix has milk for $2.99 a gallon. Sweetbay has milk for $9.99 a gallon – but Sweetbay has dancing bears on the roof and paratroopers falling from the sky with banners that read “DELICIOUS NUTRITIOUS MILK: $9.99 a gallon!” Where are you going to buy your milk? Publix of course, right? Because buyers, just like you, want to save money. No amount of fancy wording or slick advertising is going to sell a product (including a home) that is overpriced.
Of course there are the occasional instances where a lack of good marketing, or difficult access to show the property, bad MLS photos, bad Realtor, non-ideal real estate market, high interest rates, etc. cause a home not to sell. But let’s look at 10 Signs that Your Home is Overpriced, and make sure that price is not your issue.
10 Signs That Your Home is Overpriced:
1. Your asking price formula was something similar to: 1st mortgage balance + 2nd mortgage balance + Realtor fees + credit card balance + car loan payoff. Your formula should be “here’s what area similar homes sold for”…period.
2. You are praying every night for a cash buyer that won’t do an appraisal. Yikes!
3. You based your asking price on how much you spent improving it. Most improvements are made for personal enjoyment. Where is it said that you can buy an item, install it in your home, use it for a few years then ask a new buyer to pay you top dollar for it?
4. Your home has been on the market a really long time.
5. You are getting few or NO showings at all.
6. Despite several showings, no buyer has made an offer – or you received what you considered to be a low ball offer.
7. You start insisting that your Realtor advertise your home to wealthy people in Japan or Germany, and put the home on the front page of the New York Times.
8. You based your asking price on what other ACTIVE listings in the neighborhood are listed for, instead of what SOLD homes sold for.
9. Your Realtor suggested a different (i.e. LOWER) price for your home.
10. You believe your home’s uniqueness warrants a higher price than all the other homes in the area – despite similarities in age, location, condition. Remember, a home is only worth what a buyer is willing to pay at the end of the day.
If you are suffering from one or more of these 10 signs – talk to your Realtor. Ask what feedback they have been getting from agents that have shown the home – if any. Have them do a detailed updated report of area sales. It may be time for a price adjustment! Sometimes when you price your home right on the money, you’ll find you get a ton of showings and competing offers – which could actually drive the price of the home back up a bit over your asking price.
Also think about why you wanted to sell your home in the first place. Is it worth keeping the price above the market when you may be paying a mortgage payment each month, a tax bill, utilities, etc? You may find that even a small price reduction does the trick and saves you carrying costs. The market in Tampa & St. Petersburg is hot – so homes that are priced right are selling quickly! Try to look at your home through the eyes of a buyer compared to other area homes for sale and decide which one you would buy – and why.