Everyone wants to get the best price for their home when they put it up for sale on the market. With this mindset, it may seem like a smart idea to jack up the listing price well above fair market value. For example, if your home is valued at $250,000, you might be tempted to put it out there for $275,000 just to see if anyone will bite at that price.
Unfortunately, trying to bump a property for sale in Alpine well over its fair market value almost always ends in failure, for a number of reasons. Let’s take a look at some of the reasons overpriced homes end up being a debacle and why straying too far above market value will end up costing you in the end.
Missing Your Audience
Just because you list your home at $275,000 doesn’t mean someone will pay that price. In fact, you might end up appealing to an audience that’s not quite interested in your home. Worse still, trying to push your home into a higher demographic can dramatically shift its perception. Instead of being a high-end home in a lower price range, you might end up coming off as a low-end home in a high price range. Perception is everything when it comes to attracting the right audience.
Starting a Bidding War
In most cases, a bidding war is great for homeowners—it means there are multiple sellers who are willing to pay a premium for your home! In the case of an overpriced home, however, the bidding war might be between you and a single prospective buyer. In this case, the buyer will likely have leverage. If they know a home is overpriced, they’ll undercut your asking price as much as they can and, if you do eventually come to an agreement, it’s likely going to be for less than market value.
Stepping the Price Lower
When homes are listed far above their market price, they can tend to be stagnant listings. People avoid them because they know they’re overpriced. So, in order to attract new viewings, many homeowners will start to step down the price incrementally, little by little. Over time, this gives the property a negative perception. People start asking “What’s wrong with it?” or “Why does the price keep falling?” It gives off the vibe that a house is defective or that the owner is having trouble selling it.
Creating False Hype
If a home is appraised at one value and listed well above that value, it can create hype. Buyers think there must be something truly amazing about it to warrant such a jump! When they check it out and find nothing overly exceptional, the hype is immediately derailed. This is one of the fastest ways to kill interest in your home.
The moral of the story is that while it might seem like a good idea to overprice your Alpine property and see who bites, the better option is instead to price it fairly. You’ll generate more interest and come across as more reasonable, resulting in more interested offers and, potentially, a sale that’s as good or better than you’re asking. Have more questions? Contact Carpenter Real Estate today!