Overpricing Your Home: The Risks and How to Avoid Them
When it comes to selling your home, pricing it correctly is crucial. Setting the right price will help you sell your home quickly and for a price that you're comfortable with. However, one common mistake that sellers make is overpricing their homes. Here are some of the risks associated with overpricing your home and how to avoid them:
1. Deters Qualified Buyers
Overpricing your home can deter qualified buyers who are looking for homes in your price range. They may feel that your home is not worth the asking price and look for other options instead.
2. Prolongs Time on the Market
When your home is overpriced, it can take longer to sell. The longer your home sits on the market, the less buyers feel the urgency to put in an offer quickly.
3. Weakens Your Negotiating Power
If you need to do a price reduction, buyers will feel like they have extra negotiating power. This could result in you receiving less than you would have if you had priced it appropriately from the start.
4.Reduces Final Sale Price
If your home sits on the market for too long, it can go stale, and you might end up selling for less than you would have if you had priced it correctly from the start.
So, how do you determine the right listing price for your home?
1. Get a CMA from an Agent
A comparative market analysis (CMA) is an estimate of your home's value, prepared by a local real estate agent. They base their analysis on similar recently sold homes, and they often provide this service free of charge to earn your business.
2. Collect Comps on Your Own
You can do your own research by using Zillow's Recently Sold filter to identify homes that are similar to yours and have sold in the last three to six months. Use the same criteria as the agent's CMA to ensure accuracy.
3. Hire an Appraiser
If you're selling in a competitive market or need to sell quickly, it may be worth hiring an appraiser. An appraisal report can give you peace of mind about the price you've chosen, and it can be a handy negotiating tool with buyers.
Remember, underpricing is not as big of a concern as overpricing. In hot markets, underpricing can attract multiple buyers and cause a bidding war, resulting in a sale for more than the market value. However, it's crucial to find the right balance and price your home accurately to achieve a successful sale.