Everyone wants the most money when they are selling their home. However, if you are dramatically over pricing your home in hopes of getting top dollar, this may end up working against you. An asking price that is way beyond market value can negatively affect the marketing of your property. Here are 3 dangers of overpricing your home.
1 – Missed Showings
Realtors who work with buyers will be on the lookout on the MLS for homes that fall within their clients’ budget. As such, if your home is listed well above market value, its listing will not even show up on their search. If the listing doesn’t even show up on the realtor’s radar, your home won’t be shown to such prospective clients.
2 – Low Ball Offers
Any offers that may come in for your overpriced home are more likely to be ‘low ball’ offers, which will just end up resulting in a frustrating negotiation process, as well as a very small chance of the offer being accepted from either side. Home buyers of today are much more savvy when it comes to the real estate market, and are able to identify on their own whether or not a home is overpriced.
3 – Appraisals From the Bank
When a buyer purchases a home, and applies for a loan to finance the property, a bank will almost always request an appraisal. The appraised value is based on recent sales of similar properties in the neighbourhood. If your home is overpriced, the appraisal has a good chance of falling short of the offer. Banks are not in the business of loaning money out to pay for a property that’s overpriced, and may therefore reject a mortgage loan.
Overall, overpricing your house will hurt the value of your home, as well as any chances of selling within a reasonable amount of time at the price you deserve.