The Pitfalls of Overpricing Your Home

Price it Right!

When it comes to getting the most money for your home with the least headaches in the shortest time, nothing can stop that faster than overpricing. In fact, it’s the number one reason houses don’t sell. Price it Right from the start.

Timing is everything - Very often a seller believes he can price his home high to see if he will catch the “big fish” with the idea that he can always bring down the price later. – right? By doing this, you are doing significant damage to the possibility of selling your home – especially in a buyer’s market. It is a proven fact that when a home goes on the market, the greatest potential for a buyer is within the first couple months. By pricing it high with the intention of dropping the price later is a huge mistake as you are completely bypassing the best opportunity for a potential buyer.

Financing problems - Even if an agent agrees to list your overpriced home and even if you were to find a potential buyer willing to pay your price, and these are BIG IFS, lending institutions are extraordinarily cautious today. They will most certainly request an appraisal to be done on the Barbados home by a reputable appraiser. These are based on comparable recent sales in your area. If the value of the home does not match up to the fair market value to determine the amount they will finance this could spell problems for both the prospective buyer and you, the seller by extension.

Questions to be asked - Overpriced homes will attract fewer potential buyers and simply sit on the market for a long time. When considering a home to purchase, buyers don’t look at price alone. They almost always want to know how long it has been on the market. If it has been “sitting”, they want to know why, and automatically start assuming all sorts of reasons why it has not been sold.

Sells for less - Unfortunately, when a home goes on the market overpriced, it almost always eventually sells for less than market value. With too high an asking price, fewer buyers to choose from and carrying costs to maintain the property, most sellers find themselves getting less from their investment rather than the most.

Stigmatized - Once a home sits on the market for too long, it becomes stigmatized and some agents become reluctant to show the home but rather to concentrate on homes that are more likely to sell at the fair market value.

Price “want” versus value - Another mistake some sellers often make is the question of what they paid for their home or simply what they want for it or must get “in hand”. Remember the price you paid for your home or the proceeds you “want” from the sale have no effect on the value of your home and what potential buyers are willing to pay or can afford.

Deteriorate - Another important consideration with overpricing a home is the fact that the longer it stays on the market, it is likely to start deteriorating and becomes less attractive to potential buyers. This is particularly true if the home is unoccupied. This could result in necessitating remedial work and costs to the seller or the value will most certainly fall resulting in securing an even lower sale price.