Want to Start Off With a High Sales Price? Beware!
Overpricing your home is not a wise choice, especially in a buyer’s market. Your house will take longer to sell and you will get less if the market continues to decline. Later, when you have to drop your price, your house is “old news.” You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Besides, your home’s entire listing history is online for every Realtor to see. Many savvy buyers ask for a properties listing history before making an offer. If they see your home has been listed a long time and that you have lowered the price several times to finally reach the market, they may be inclined to offer you less.
Even if you do successfully sell at an above market price, your buyer may need a mortgage. Mortgage lenders today have very strict appraisal requirements. More often than not, the contract price is higher than what the appraisal comes in at. The only choice the seller has in that situation is to reduce the contract price or put the home back on the market in hopes of finding a cash buyer. Reducing your options to all cash buyers who are willing to pay over market price is a sure recipe for a long sales process.
By overpricing your home from the beginning, you could actually end up settling for a lower price than you would have normally received.
To price your home correctly at the start, use comparable sales in the last 3 months. In a declining buyer’s market, only go back 6 months if you can’t find any comparable sales within the last 3 months.