Unfortunately some of the homes currently on the market will never sell. This is because some sellers are overpricing their homes. This is nothing new, as some sellers will always over-price a home. Although over-priced sellers actually do want to sell their home, they are misinformed or in denial about the market.
Sometimes sellers are under the impression that they can always come down, but you can’t go up – so they overprice it. In reality, you can go up if it’s priced correctly because a fairly priced, attractive home in a desirable area attracts buyers who may bid up the price.
Most buyers won’t go to see an over-priced home, and if they don’t see it they can’t “fall in love” and make an offer. But if they do, buyers who are shown an over-priced home will compare it to similar (and properly priced) homes that offer them more value, and will reject and not make an offer on the over-priced home.
This is probably the biggest misconception sellers have about selling their home – that despite being over-priced, it will generate showings and maybe an offer, and even if is less, it might be high enough to accept. Those sellers don’t understand that buyers don’t make offers on over-priced homes, especially when there is plenty of competition.
When you hear from the media that it’s a seller, balanced, or normal market, that’s still not a reason to overprice your home. It simply means if you price your home at or close to market value, it should attract showings and buyers in a reasonable time.
But this isn’t always the case in a buyer’s market, and that is what we are in right now. Even homes that are priced properly are lingering on the market due to a lack of buyers. So over-priced homes will not sell now, period.
Another thing the seller of an over-priced home doesn’t factor in is cost of missing out on a number of benefits:
- The seller incurred “opportunity loss” – the home didn’t sell when it should have, so the seller has incurred costs and wasted money on additional mortgage payments, utility bills, maintenance and repairs, etc.
- The seller’s search for a suitable replacement home was delayed, and maybe the seller has missed or lost out on a suitable replacement home;
- The seller had to keep the home in show ready condition for longer than necessary;
- The seller had the inconvenience of having to arrange for showings of the home longer than necessary;
- The seller’s time has been wasted and there will be unnecessary stress worrying why the home hasn’t sold.
And most importantly, it has always been true that homes get the most interest, generate the most offers, and sell for the highest price during the period immediately after it is listed. So you are likely not to get the price you would have got if it was listed correctly.
If your agent has used too high of a price to induce you to list with him or her, the agent has failed to put your interest first, you missed the opportunity to sell, and in any event I can’t imagine you would be happy to know you were misled on the value of your home.
If you’re interested in selling, it’s a good time to talk to a professional that can represent your best interest, help you price it correctly and get it sold. If you’d like to speak with me, contact me at email@example.com or call 480 675-0112.
Mr. Kramoltz, JD, GRI, CIPS is the Designated Broker for SimplySOLD Arizona, a boutique real estate brokerage that specializes in the global marketplace. Mr. Kramoltz writes articles that provide valuable and unique information on local and international real estate issues from his perspective as a real estate attorney, an Arizona Department of Real Estate certified instructor, and an active licensee. Check SimplySOLD’s Facebook page regularly, follow him on twitter @azpropexpert, and visit www.simplysoldaz.com for prior blogs, properties for sale, and more on Arizona real estate.
N. Mark Kramoltz © 2014, All Rights Reserved.