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The Wrong Reasons To Price Your Home High

Overpricing a home is the biggest mistake a seller can make. Asking a high price for your home may show pride of ownership, that you value your investment, that you’ve cared for the home and kept it updated and in good repair. But if your home doesn’t compare well to other similar homes for sale, it can work against you. 

Why? First impressions count, and you didn’t make a good one.  If the first impression the market had of your home is that it’s overpriced, and then it will speculate as to why. You’re crazy, unreasonable, greedy, out of touch, desperate or you owe money to gangsters. Then when it doesn’t sell, they wonder if something is wrong with the home.  

A wounded seller tends to bring out the predator in buyers, which is one reason why homes that have been repriced often attract lower offers than other similar homes. 

It’s far better to make a good first impression on the market – that your home is offered at a fair price because you are a reasonable seller. So, take a good hard look at your reasons for pricing your home. If any of the following are true, you’re setting yourself up to take less not more for your home.  

Buyers like to negotiate. Buyers may want to negotiate, but they definitely feel more comfortable negotiating in their price range. It’s psychologically easier to ask for a little discount on a home within reach than to ask for a big discount on a home they otherwise couldn’t afford.  

You must win. If you assume that the buyer is a “greater fool,” you can’t assume they also have a foolish real estate professional and a foolish lender. If buyers are wisely guided, they’ll offer what they think your home is worth, what they believe you’ll accept, and what their lender will approve. 

You’re entitled to make a profit. Home prices historically beat inflation but sellers must keep their homes updated and well-maintained to hold value, so you have to reinvest to keep your home competitive.  If you’re trying to sell too soon after buying, it’s unlikely you’ve built up much equity, and a chunk of that will go toward transaction costs. 

Your home is your bank. Many sellers dream of being able to start fresh, pay off debts, buy a more expensive home, retire, pay for collage, etc. Buyers don’t mind giving sellers fair market value, but if the market conditions don’t support your price, they’ll move on to a better deal.  

Your buyer will be more affluent. Buyers who can afford to pay the inflated price of your home will simply compare your home to others in the same range and find that others have better locations, more square footage and snazzier finishes for the same price.  They’re affluent because they do their homework. 

You can always reduce the price. Not only will you lose valuable time by testing the market, your home will get fewer showings and if you get any offers at all, they’ll be lowball enough to shock you. You’ll have to lower the price.  

Keep in mind that a home will never sell for more than a willing buyer will pay for it, and a willing bank will finance. You’re always better off pricing your home so that you can get as close to 100% of your asking price as possible.  

Only then, will your home sell quickly and for more money.