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Don’t Overprice Your Home

One of the most well-known real estate mantras your Berkshire Hathaway HomeServices network professional will tell you is this: “If you overprice your home, it will take longer to sell and it will sell for less money.” Yet, many sellers believe their homes are either special enough to defy the marketplace or they want to cash in on a rising market.  

Sometimes, it’s appropriate to choose a list price higher than other homes similar to yours have sold for, but that strategy seldom works unless the market is climbing rapidly. For most sellers, overpricing seldom works because buyers are just as smart as you are. They also have access to the same market data that you do. 

Let’s say your neighborhood’s highest, most recent home sale was $500,000, and your listing agent suggests a listing price of $509,999. You want to test the market at $530,000 - which is $20,000 more than your agent recommends, and $30,000 over the latest comparable sale. 

Your home hits the market at $530,000 and may get some showings the first week, because your new listing alert has gone out to all agents. By the second week, there are few to no showings. Other real estate professionals report back to your listing agent that their buyers said your home “needs too much work for the price,” or that they “found something more suited to their needs.” 

So what happened? The fact is that buyers search for homes according to their loan qualifications. If their ceiling is $500,000, they’re not going to know about or consider homes priced at $530,000. This means your home won’t be seen or considered by the buyers who are most qualified to buy it. And, buyers who can afford more will compare your home to other homes priced at $530,000 and find that your home falls short by comparison in looks, features, location or condition. 

Buyers typically use $10,000 increments for homes over $100,000 homes and $100,000 increments for homes above a million dollars.  Pricing just over a logical point like $501,000 will exclude that home from some search results. But if you price your home just under a range end point, like $499,000 or $509,999, your home will be seen by the buyers who are most likely to buy your home. 

And who knows? If the market is rising as well as you think it is, you might receive multiple offers and offers over list price. At least you have room to negotiate. 

Your best chance of selling your home quickly for the highest price possible is to attract buyers who see your home as well priced. You’ll attract more serious buyers who will make higher offers with fewer demands.